Week 3 Reflection Summary

Week 3 Reflection Summary

There were many things we learned about in week three. Some of them included keeping records as business owners, forming a corporation, stocks, dividends, retained earnings, and investments. We can all take something from our readings which correlated with our problems and discussions for the week.

The week three reading was quite interesting because it taught us so much about keeping records as a business owner so that you can be able to acknowledge the cash flow and sales of the organization. We have learned more about the methods of depreciation and a straight-line depreciation method is not a useful method for many assets like plant and machinery. But, the straight line depreciation is the simplest methods for expensing an asset which determine the value of a company's asset as the business grow. It helps a lot to understand how companies take these methods into consideration when they calculate their finances.

During week three we learned about forming a corporation. It is seemingly not as complex as some of us thought it would be. The filing of an application with the state in which the corporation will be based is done first, next it will be given a charter that will help it to form its corporation's by-laws. Corporation need to be sure that when incorporating that it is in a state that works in favor of the company especially when it comes to the state regulations that will affect how it does business. Corporations that are held privately sometimes need to make the decision to take the company public to raise capital that will help in the growth of the corporation, which can also lead to issues that can arise from taking the company public. For example, allowing another company to buy controlling interest in the stock of the company and changing the company.

We have also learned a great deal about stock this week. Preferred stock gives you more return on investment and a corporation allows a company to have unlimited capital...