[$3,000] [$1,000] Shareholders’ equity Paid-in Capital: Capital stock (par): Preferred 10%, $10 par, cumulative, nonparticipating $100 Common $1 par 55 Common stock dividends distributable 5 Additional Paid-in Capital: Paid-in capital – excess of par, common 260 Paid-in capital – excess of par, preferred 50 Paid-in capital – share repurchase 8 Paid-in capital – conversion of bonds 7 Paid-in capital – options 9 Paid-in capital – stock award plan 5 Paid-in capital – of stock options 1 Total paid-in capital $ 500 Retained earnings 1,670 Accumulated Components of Comprehensive Income: Unrealized gains (losses) on investment securities (85) Unrealized net loss on pensions (75) Deferred gains (losses) on derivatives (4) Foreign currency translation adjustments -0- (164) Treasury (at cost) (6) shareholders’ equity $2,000 T18-2
STATEMENT OF SHAREHOLDERS' EQUITY Wal-Mart Accum. Total Capital in Other Walmart Common Excess of Retained Sh/Hdrs’ (In millions, except per share amounts) Shares Stock Par Value Earnings Income Equity Balances – February 1, 2008 3,973 $397 $3,028 $57,022 $3,864 $64,311 Consolidated net income — — — 13,381 — 13,381 Other comprehensive income — — — — (6,552) (6,552) Cash dividends ($0.95 per share) — — — (3,746) — (3,746) Purchase of Company stock (61) (6) (95) (3,315) — (3,416) Other 13 2 987 2 — 991 Balances – January 31, 2009 3,925 393 3,920 63,344 (2,688) 64,969 Consolidated net income — — — 14,370 — 14,370 Other comprehensive income 2,618 2,618 Cash dividends ($1.09 per share) — — — (4,217) — (4,217) Purchase of Company stock (145) (15) (246) (7,136) — (7,397) Purchase of redeemable noncontrolling interest — — (288) — — (288) Other 6 — 417 (4) — 413 Balances – January 31, 2010 3,786 378 3,803 66,357 (70) 70,468 Consolidated net income — — — 16,389 — 16,389 Other comprehensive income — — — 716 716 Cash dividends ($1.21 per share) — — — (4,437) — (4,437) Purchase of Company stock (280) (28) (487) (14,319) — (14,834) Other 10 2 261 (23) — 240 Balances – January 31, 2011 3,516 $352 $3,577 $63,967 $646 $68,542 T18-4
MORE THAN ONE SECURITY SOLD FOR A SINGLE  More than one security might be sold for a single price. The cash received usually is the sum of the separate market values of the two securities. Each is then recorded at its market value.  If only one security’s value is known, the second security’s market value is inferred from the total selling price. AP&P issues 4 million of its common shares, $1 par per share, and 4 million of its preferred shares, $10 par, for $100 million. Today’s issue of the Wall Street Journal lists AP&P’s common at $10 per share. There is no established market for the preferred shares: ($ in millions) Cash 100 Common stock (4 million shares x $1 par) 4 Paid-in capital – excess of par, common 36 Preferred stock (4 million shares x $10 par) 40 Paid-in capital – excess of par, preferred 20  If the total selling price is not equal to the sum of the two market prices, the total selling price is allocated between the two securities in proportion to their relative market values. T18-7
COMPARISON OF RETIREMENT AND TREASURY STOCK ACCOUNTING – SHARE BUYBACKS American Semiconductor’s balance sheet included the following: Shareholders' Equity ($ in millions) Common stock, 100 million shares at $1 par $ 100 Paid-in capital – excess of par 900 Paid-in capital – share repurchase 2 Retained earnings 2,000 Retirement Treasury Stock Reacquired 1 million of its common shares Case 1: Shares repurchased at $7 per share Common stock ($1 par x 1 million sh) 1 Treasury stock (cost) 7 PIC – excess of par ($9 per sh) 9 PIC – share repurchase (difference) 3 Cash 7 Cash 7 OR Case 2: Shares repurchased at $13 per Common stock ($1 par x 1 million sh) 1 Treasury stock (cost) 13 PIC – excess of par ($9 per sh) 9 PIC – share repurchase 2* Retained earnings (difference) 1 Cash 13 Cash 13 *Because there is a $2 million credit balance. T18-9