GrueX Posts: 1, Reputation: 1 New Member   #1 Apr 17, 2011, 07:00 PM

Corporations, Shares and Equity (doing the bloody taxes) Hi. Ive got a small family farm and we incorporated last year for various reasons. We started with 4 shareholders and now only have 3 after buying out the fourth. We valued the shares at the time of the buyout based on cash-on-hand(the companie's only asset). I plugged in the number to Simply Accounting and it shows under "Equity - Share Capital - Account Preferred Shares" as a negative number. Which might fit with other answers I have seen that mention "Contra Equity"... I assume the software knows what it is doing and I checked that cash was credited for the transaction. When the shares were originally issued the lawyer advised us that valuing the shares was not important and so I haven't paid any attention to the issue until I started muddling through the taxes. *Question 1: Should the Share Capital Equity under the Account Preferred Shares number appear as a negative? *Question 2: Because there is a value on the books for the treasury shares would it be prudent(save me headaches) to value the remaining stocks (held by shareholders) and record them to the books? *Question 3: Which accounts would be debited/credited to account for the stock held by shareholders.

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