Addis Ababa University, School of Commerce

Department of Accounting & Finance

Advanced Financial Accounting I

Chapter 2

Stockholder’s Equity

Chapter
October, 2024
14-1
 Section I

CORPORATIONS:
ORGANIZATION AND CAPITAL
STOCK TRANSACTIONS

Chapter
14-2
 Study Objectives

1. Identify the major characteristics of a corporation.

2. Differentiate between paid-in capital and retained
earnings.
3. Record the issuance of common stock.
4. Explain the accounting for treasury stock.
5. Differentiate preferred stock from common stock.
6. Prepare a stockholders’ equity section.
7. Compute book value per share.

Chapter
14-3
 Corporations: Organization and
Capital Stock Transactions

The Corporate Accounting Accounting Statement

Preferred
Form of for Common for Treasury Presentation
Stock
Organization Stock Issues Stock and Analysis

Characteristic Issuing par Purchase of Dividend Presentation

s value stock treasury preferences Analysis—Book
Formation Issuing no- stock Liquidation value per share
Stockholder par stock Disposal of preference
rights Issuing stock treasury
for services stock
Stock issue
considerations or noncash
assets
Corporate
capital

Chapter
14-4
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited Liability of Stockholders
Transferable Ownership Rights Advantages
Ability to Acquire Capital
Continuous Life
Government Regulations
Additional Taxes Disadvantages
Corporate Management
Chapter
14-5
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Corporation acts
Separate Legal Existence under its own name
Limited Liability of Stockholders rather than in the
name of its
Transferable Ownership Rights stockholders.
Ability to Acquire Capital
Continuous Life
Government Regulations
Additional Taxes
Corporate Management
Chapter
14-6
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited to their
Limited Liability of Stockholders
investment.
Transferable Ownership Rights
Ability to Acquire Capital
Continuous Life
Government Regulations
Additional Taxes
Corporate Management
Chapter
14-7
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited Liability of Stockholders
Shareholders may
Transferable Ownership Rights
sell their stock.
Ability to Acquire Capital
Continuous Life
Government Regulations
Additional Taxes
Corporate Management
Chapter
14-8
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited Liability of Stockholders
Transferable Ownership Rights Corporation can
Ability to Acquire Capital obtain capital
through the
Continuous Life issuance of stock.
Government Regulations
Additional Taxes
Corporate Management
Chapter
14-9
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited Liability of Stockholders
Transferable Ownership Rights Continuance as a
Ability to Acquire Capital going concern is not
affected by the
Continuous Life withdrawal, death,
Government Regulations or incapacity of a
stockholder,
Additional Taxes employee, or
Corporate Management officer.
Chapter
14-10
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited Liability of Stockholders
Transferable Ownership Rights
Ability to Acquire Capital
Continuous Life
Government Regulations
Additional Taxes
Corporate Management
Chapter
14-11
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited Liability of Stockholders
Transferable Ownership Rights
Ability to Acquire Capital Corporations pay
income taxes as a
Continuous Life separate legal entity
Government Regulations and in addition,
stockholders pay
Additional Taxes
taxes on cash
Corporate Management dividends.
Chapter
14-12
 Characteristics of a Corporation

Characteristics that distinguish corporations from

proprietorships and partnerships.
Separate Legal Existence
Limited Liability of Stockholders
Transferable Ownership Rights
Ability to Acquire Capital Separation of
ownership and
Continuous Life management prevents
Government Regulations owners from having
an active role in
Additional Taxes
managing the
Corporate Management company.
Chapter
14-13
 Characteristics of a Corporation

Stockholders

Chairman and
Board of
Directors

President and
Chief Executive
Officer

General Vice President Vice President

Vice President Vice President
Counsel and Finance/Chief Human
Marketing Operations
Secretary Financial Officer Resources

Treasurer Controller

Chapter
14-14
 Forming a Corporation

Initial Steps:
File application with the Secretary of State.
State grants charter.
Corporation develops by-laws.

Companies generally incorporate in a state whose laws

are favorable to the corporate form of business
(Delaware, New Jersey).

Corporations expense organization costs as incurred.

Chapter
14-15
 Ownership Rights of Stockholders
Illustration 13-3
Stockholders have the right to:

1. Vote in election of board of

directors and on actions that
require stockholder approval.

2. Share the corporate earnings

through receipt of dividends.

Chapter
14-16
 Ownership Rights of Stockholders

Stockholders have the right to:

3. Keep the same percentage ownership when new
shares of stock are issued (preemptive right*).

* A number of companies have eliminated the preemptive right.

Chapter
14-17
 Ownership Rights of Stockholders

Stockholders have the right to:

4. Share in assets upon liquidation in proportion to
their holdings. This is called a residual claim.

Chapter
14-18
 Ownership Rights of Stockholders
Prenumbered

Class
Class A Class A
COMMON STOCK COMMON STOCK

PAR VALUE PAR VALUE

$1 PER SHARE $1 PER SHARE

Name of corporation
Stockholder’s name
Shares
Stock Certificate

Signature of
corporate official
Chapter
14-19
 Stock Issue Considerations

Authorized Stock
Charter indicates the amount of stock that a
corporation is authorized to sell.
Number of authorized shares is often reported
in the stockholders’ equity section.

Chapter
14-20
 Stock Issue Considerations

Issuance of Stock
Corporation can issue common stock directly to
investors or indirectly through an investment
banking firm.
Factors in setting price for a new issue of stock:
1. the company’s anticipated future earnings
2. its expected dividend rate per share
3. its current financial position
4. the current state of the economy
5. the current state of the securities market
Chapter
14-21
 Stock Issue Considerations

Market Value of Stock

Stock of publicly held companies is traded on
organized exchanges.
Interaction between buyers and sellers determines
the prices per share.
Prices set by the marketplace tend to follow the
trend of a company’s earnings and dividends.
Factors beyond a company’s control, may cause day-
to-day fluctuations in market prices.

Chapter
14-22
 Stock Issue Considerations

Par and No-Par Value Stock

Years ago, par value determined the legal capital
per share that a company must retain in the
business for the protection of corporate creditors.
Today many states do not require a par value.
No-par value stock is quite common today.
In many states the board of directors assigns a
stated value to no-par shares.

Chapter
14-23
 Corporate Capital

Common Stock
Account
Paid-in Capital in
Paid-in Capital
Excess of Par
Account
Preferred Stock
Account

Two Primary
Sources of Retained Earnings
Account
Equity

Paid-in capital is the total amount of cash and other assets

paid in to the corporation by stockholders in exchange for
capital stock.
Chapter
14-24
 Corporate Capital

Common Stock
Account
Additional Paid-
Paid-in Capital
in Capital
Account
Preferred Stock
Account

Two Primary
Sources of Retained Earnings
Account
Equity

Retained earnings is net income that a corporation retains

for future use.

Chapter
14-25
 Corporate Capital

Comparison of the owners’ equity (stockholders’

equity) accounts reported on a balance sheet for a
proprietorship, a partnership, and a corporation.

Chapter
14-26
 Accounting for Common Stock Issues

Primary objectives:
1) Identify the specific sources of paid-in capital.
2) Maintain the distinction between paid-in capital
and retained earnings.

The issuance of common stock affects only

paid-in capital accounts.

Chapter
14-27
 Accounting for Common Stock Issues

Illustration: Viking Corporation issued 300 shares of

$10 par value common stock for $4,100. Prepare
Vikings’ journal entry.

Cash 4,100
Common stock (300 x $10) 3,000
Paid-in capital in excess of par 1,100

Chapter
14-28
 Accounting for Common Stock Issues

Illustration: Knopfle Corporation issued 600 shares of

no-par common stock for $10,200. Prepare Knopfle’s
journal entry if (a) the stock has no stated value, and
(b) the stock has a stated value of $2 per share.

a. Cash 10,200
Common stock 10,200

b. Cash 10,200
Common stock (600 x $2) 1,200
Paid-in capital in excess of stated value 9,000

Chapter
14-29
 Accounting for Common Stock Issues

Issuing Common Stock for Services or

Noncash Assets
Corporations also may issue stock for:
Services (attorneys or consultants).
Noncash assets (land, buildings, and equipment).

Cost is either the fair market value of the consideration

given up, or the fair market value of the consideration
received, whichever is more clearly determinable.

Chapter
14-30
 Accounting for Common Stock Issues

E On March 2nd, Leone Co. issued 5,000 shares of $5

par value common stock to attorneys in payment of a bill
for $30,000 for services provided in helping the
company to incorporate.

Organizational expense 30,000

Common stock (5,000 x $5) 25,000
Paid-in capital in excess of par 5,000

Chapter
14-31
 Accounting for Common Stock Issues

B Kane Inc.’s $10 par value common stock is actively

traded at a market value of $15 per share. Kane issues
5,000 shares to purchase land advertised for sale at
$85,000. Journalize the issuance of the stock in
acquiring the land.

Land (5,000 x $15) 75,000

Common stock (5,000 x $10) 50,000
Paid-in capital in excess of par 25,000

Chapter
14-32
 Accounting for Treasury Stock

Common Stock
Account
Paid-in Capital in
Paid-in Capital
Excess of Par
Account
Preferred Stock
Account

Two Primary
Sources of Retained Earnings
Account
Equity

Less:
Treasury Stock
Account

Chapter
14-33
 Accounting for Treasury Stock

Treasury stock - corporation’s own stock that it

has reacquired from shareholders, but not retired.
Corporations purchase their outstanding stock:
1. To reissue the shares to officers and employees under
bonus and stock compensation plans.
2. To enhance the stocks market value.
3. To have additional shares available for use in the
acquisition of other companies.
4. To increase earnings per share.
5. To rid the company of disgruntled investors, perhaps to
avoid a takeover.
Chapter
14-34
 Accounting for Treasury Stock

Purchase of Treasury Stock

• Debit Treasury Stock for the price paid to
reacquire the shares.

•Treasury stock is a contra stockholders’

equity account, not an asset.

•Purchase of treasury stock reduces

stockholders’ equity.

Chapter
14-35
 Accounting for Treasury Stock

Illustration: UC Company originally issued 15,000

shares of $1 par, common stock for $25 per share.
Record the journal entry for the following transaction:
On April 1st the company reacquired 1,000 shares for
$28 per share.

Treasury stock (1,000 x $28) 28,000

Cash 28,000

Chapter
14-36
 Accounting for Treasury Stock

Stockholders’ Equity with Treasury stock

UC Company
Balance Sheet (partial)
Stockholders' equity
Paid-in capital
Common stock, $1 par, 15,000 issued
and 14,000 outstanding $ 15,000
Paid-in capital in excess of par 360,000
Retained earnings 200,000
Total paid-in capital and retained earnings 575,000
Less: Treasury stock (1,000 shares) 28,000
Total stockholders' equity $ 547,000

Both the number of shares issued (15,000), outstanding

(14,000), and the number of shares held as treasury (1,000) are
disclosed.
Chapter
14-37
 Accounting for Treasury Stock

Sale of Treasury Stock

Above Cost
Below Cost

Both increase total assets and stockholders’

equity.

Chapter
14-38
 Above
Accounting for Treasury Stock Cost

Illustration: UC Company originally issued 15,000

shares of $1 par, common stock for $25 per share. On
February 10, UC acquired 1000 shares of its stock at
$28 per share. Record the journal entry for the
following transaction:
On June 1, UC sold 500 shares of its treasury stock for
$30 per share.

Cash (500 x $30) 15,000

Treasury stock (500 x $28) 14,000
Paid-in capital treasury stock 1,000

Chapter
14-39
 Below
Accounting for Treasury Stock Cost
Illustration: UC Company originally issued 15,000
shares of $1 par, common stock for $25 per share. On
February 10, UC acquires 1000 shares of its stock for
$28 per share and on July 15 sold 200 shares of
treasury for $24 per share. Record the journal entry
for the following transaction:
On October 15, UC sold the remaining 300 shares of its
treasury stock for $24 per share.
Limited
Cash (300 x $24) 7,200 to
balance
Paid-in capital treasury stock 200 on hand
Retained earnings 1,000
Treasury stock (300 x $28) 8,400
Chapter
14-40
 Preferred Stock

Features often associated with preferred stock.

1. Preference as to dividends.
2. Preference as to assets in liquidation.
3. Nonvoting.

Accounting for preferred stock at issuance is

similar to that for common stock.

Chapter
14-41
 Preferred Stock

B Acker Inc. issues 5,000 shares of $100 par value

preferred stock for cash at $130 per share. Journalize
the issuance of the preferred stock.

Cash (5,000 x $130) 650,000

Preferred stock (5,000 x $100) 500,000
Paid-in capital in excess of par –
Preferred stock 150,000

Preferred stock may have a par value or no-par value.

Chapter
14-42
 Preferred Stock

Dividend Preferences
Right to receive dividends before common
stockholders.
Per share dividend amount is stated as a
percentage of the preferred stock’s par value or
as a specified amount.
Cumulative dividend – holders of preferred
stock must be paid their annual dividend plus any
dividends in arrears before common
stockholders receive dividends.
Chapter
14-43
 Statement Analysis and Presentation

Chapter
14-44
 Statement Analysis and Presentation

Analysis
Total Stockholders’ Equity *
Book Value
=
Per Share
Number of
Common Shares Outstanding

Book value per share generally does not equal market value
per share.

* When a company has preferred stock, the preferred

stockholders claim on net assets must be deducted from
total stockholders’ equity.
Chapter
14-45
 Part II
Additional Aspects of
Stockholder’s Equity

Dividends, Retained Earning,

Stock Split & Income Reporting

Chapter
14-46
 Study Objectives

1. Prepare the entries for cash dividends and stock

dividends.
2. Identify the items reported in a retained earnings
statement.
3. Prepare and analyze a comprehensive
stockholders’ equity section.
4. Describe the form and content of corporation
income statements.
5. Compute earnings per share.

Chapter
14-47
 Dividends, Retained Earnings, and Income
Reporting

Statement
Retained
Dividends Presentation and
Earnings
Analysis

Cash dividends Retained earnings Stockholders’

Stock dividends restrictions Equity
Prior period Presentation
Stock splits
adjustments Stockholders’
Retained earnings Equity Analysis
statement Income Statement
Presentation
Income Statement
Analysis

Chapter
14-48
 Dividends

A distribution of cash or stock to stockholders

on a pro rata (proportional) basis.

Types of Dividends:
1. Cash dividends. 3. Script (promissory note).
2. Property dividends. 4. Stock dividends.

Dividends expressed: (1) as a percentage of the par or

stated value, or (2) as a dollar amount per share.

Chapter
14-49
 Dividends

Dividends require information concerning three dates:

Chapter
14-50
 Dividends

Cash Dividends
For a corporation to pay a cash dividend, it must have:
1. Retained earnings - Payment of cash dividends
from retained earnings is legal in all states.
2. Adequate cash.
3. A declaration of dividends by the Board of
Directors.

Chapter
14-51
 Dividends
Illustration: What would be the journal entries
made by a corporation that declared a $50,000 cash
dividend on March 10, payable on April 6 to
shareholders of record on March 25?
March 10 (Declaration Date)
Retained earnings 50,000
Dividends payable 50,000
March 25 (Date of Record) No entry

April 6 (Payment Date)

Dividends payable 50,000
Cash 50,000
Chapter
14-52
 Dividends

Allocating Cash Dividends Between

Preferred and Common Stock

Holders of cumulative preferred stock must be

paid any unpaid prior-year dividends before
common stockholders receive dividends.

Chapter
14-53
 Dividends

Exercise Arnez Corporation was organized on January

1, 2008. During its first year, the corporation issued
2,000 shares of $50 par value preferred stock and
100,000 shares of $10 par value common stock. At
December 31, the company declared the following cash
dividends: 2008, $6,000, 2009, $12,000, and 2010,
$28,000.
Instructions: (a) Show the allocation of dividends to
each class of stock, assuming the preferred stock
dividend is 8% and not cumulative.

Chapter
14-54
 Dividends

Exercise (a) Show the allocation of dividends to each

class of stock, assuming the preferred stock dividend is
8% and not cumulative.

2008 2009 2010

Dividends declared $ 6,000 $ 12,000 $ 28,000
Allocation to preferred * 6,000 8,000 8,000
Remainder to common $ - $ 4,000 $ 20,000

* 2,000 shares x $50 par x 8% = $8,000

Chapter
14-55
 Dividends

Exercise (b) Show the allocation of dividends to each

class of stock, assuming the preferred stock dividend is
9% and cumulative.

2008 2009 2010

Dividends declared $ 6,000 $ 12,000 $ 28,000
Dividends in arrears 3,000 **
Allocation to preferred * 6,000 9,000 9,000
Remainder to common $ - $ - $ 19,000

* 2,000 shares x $50 par x 9% = $9,000

** 2008 Pfd. dividends $9,000 – declared $6,000 = $3,000
Chapter
14-56
 Dividends

Exercise (c) Journalize the declaration of the cash

dividend at December 31, 2010, under part (b).

2008 2009 2010

Dividends declared $ 6,000 $ 12,000 $ 28,000
Dividends in arrears 3,000
Allocation to preferred 6,000 9,000 9,000
Remainder to common $ - $ - $ 19,000

Journal entry:
Retained earnings 28,000
Dividends payable 28,000
Chapter
14-57
 Dividends

Stock Dividends
Pro rata distribution of the corporation’s own stock.

Results in decrease in retained earnings and increase in paid-in capital.

Chapter
14-58
 Dividends

Stock Dividends
Reasons why corporations issue stock dividends:
1. To satisfy stockholders’ dividend expectations
without spending cash.
2. To increase the marketability of the corporation’s
stock.
3. To emphasize that a portion of stockholders’ equity
has been permanently reinvested in the business.

Chapter
14-59
 Dividends

Size of Stock Dividends

Small stock dividend (less than 20–25% of the

corporation’s issued stock, recorded at fair
market value) *

Large stock dividend (greater than 20–25% of

issued stock, recorded at par value)

* This accounting is based on the assumption that a small

stock dividend will have little effect on the market price of
the outstanding shares.
Chapter
14-60
 Dividends
Illustration: HH Inc. has 5,000 shares issued and
outstanding. The per share par value is $1, book value
$32 and market value is $40.

10% stock dividend is declared

Retained earnings (5,000 x 10% x $40) 20,000
Common stock dividends distributable 500
Additional paid-in capital 19,500

Stock issued
Common stock div. distributable 500
Common stock (5,000 x 10% x $1) 500

Chapter
14-61
 Dividends

Stockholders’ Equity with Dividends Distributable

HH Inc.
Balance Sheet (partial)
Stockholders' equity
Paid-in capital
Common stock, $1 par, 5,000 issued
and outstanding $ 5,000
Common stock dividends distributable 500
Paid-in capital in excess of par 64,500
Retained earnings 90,000
Total stockholders' equity $ 160,000

Chapter
14-62
 Dividends

Effects of Stock Dividends

HH Inc. Before After Net
Dividend Dividend Change
Stockholders' equity
Paid-in capital
Common stock, $1 par, 5,000 issued
and outstanding $ 5,000 $ 5,500 $ 500
Paid-in capital in excess of par 45,000 64,500 19,500
Retained earnings 110,000 90,000 (20,000)
Total stockholders' equity $ 160,000 $ 160,000 $ 0
Outstanding shares 5,000 5,500
Book value per share $ 32 $ 29

Chapter
14-63
 Dividends

Question
Which of the following statements about small stock
dividends is true?
a. A debit to Retained Earnings for the par value of
the shares issued should be made.
b. A small stock dividend decreases total
stockholders’ equity.
c. Market value per share should be assigned to the
dividend shares.
d. A small stock dividend ordinarily will have no
effect on book value per share of stock.
Chapter
14-64
 Dividends

Question
In the stockholders’ equity section, Common Stock
Dividends Distributable is reported as a(n):
a. deduction from total paid-in capital and
retained earnings.
b. current liability.
c. deduction from retained earnings.
d. addition to capital stock.

Chapter
14-65
 Dividends

Stock Split
Reduces the market value of shares.
No entry recorded for a stock split.
Decrease par value and increase number of
shares.

Chapter
14-66
 Dividends

Illustration: HH Inc. has 5,000 shares issued and

outstanding. The per share par value is $1, book
value $32 and market value is $40.

2 for 1 Stock Split

No Entry -- Disclosure that par is now $.50 and

shares outstanding are 10,000.

Chapter
14-67
 Dividends

Effects of Stock split

HH Inc. Before After Net
Split Split Change
Stockholders' equity
Paid-in capital
Common stock $ 5,000 $ 5,000 $ -
Paid-in capital in excess of par 45,000 45,000 -
Retained earnings 110,000 110,000 -
Total stockholders' equity $ 160,000 $ 160,000 $ -

Outstanding shares 5,000 10,000

Book value per share $ 32 $ 16

Chapter
14-68
 Retained Earnings

Retained earnings is net income that a company

retains for use in the business.

Net income increases Retained Earnings and a

net loss decreases Retained Earnings.

Retained earnings is part of the stockholders’

claim on the total assets of the corporation.

A debit balance in Retained Earnings is

identified as a deficit.

Chapter
14-69
 Retained Earnings Restrictions

Restrictions can result from:

1. Legal restrictions.
2. Contractual restrictions.
3. Voluntary restrictions.

Companies generally disclose retained earnings

restrictions in the notes to the financial statements.

Chapter
14-70
 Prior Period Adjustments

Corrections of Errors
Result from:
➢ mathematical mistakes
➢ mistakes in application of accounting principles
➢ oversight or misuse of facts

Corrections treated as prior period adjustments

Adjustment made to the beginning balance of
retained earnings

Chapter
14-71
 Prior Period Adjustments
Woods, Inc.
Statement of Retained Earnings
For the Year Ended December 31, 2008

Balance, January 1 $ 1,050,000

Net income 360,000
Dividends (300,000)
Balance, December 31 $ 1,110,000

Before issuing the report for the year ended December 31, 2008, you
discover a $50,000 error (net of tax) that caused the 2007 inventory
to be overstated (overstated inventory caused COGS to be lower and
thus net income to be higher in 2007. Would this discovery have any
impact on the reporting of the Statement of Retained Earnings for
2008?
Chapter
14-72
 Retained Earnings Statement
Woods, Inc.
Statement of Retained Earnings
For the Year Ended December 31, 2008

Balance, January 1, as previously reported $ 1,050,000

Prior period adjustment - error correction (50,000)
Balance, January 1, as restated 1,000,000
Net income 360,000
Dividends (300,000)
Balance, December 31 $ 1,060,000

Chapter
14-73
 Retained Earnings Statement

The company prepares the statement from the

Retained Earnings account.

Chapter
14-74
 Retained Earnings Statement

Question
All but one of the following is reported in a retained
earnings statement. The exception is:
a. cash and stock dividends.
b. net income and net loss.
c. some disposals of treasury stock below cost.
d. sales of treasury stock above cost.

Chapter
14-75
 Statement Analysis and Presentation

Chapter
14-76
 Statement Analysis and Presentation

Stockholders’ Equity Analysis

Return on Net Income Available

Common to Common Stockholders
=
Stockholders’ Average Common
Equity Stockholders’ Equity

This ratio shows how many dollars of net income the

company earned for each dollar invested by the
stockholders.

Chapter
14-77
 Statement Analysis and Presentation

Income
Statement
Presentation

Chapter
14-78
 Statement Analysis and Presentation

Income Statement Analysis

Net Income minus

Earnings Preferred Dividends
=
Per Share
Weighted-Average Common
Shares Outstanding

This ratio indicates the net income earned by each

share of outstanding common stock.

Chapter
14-79
 Statement Analysis and Presentation

Question
The income statement for Nadeen, Inc. shows income
before income taxes $700,000, income tax expense
$210,000, and net income $490,000. If Nadeen has
100,000 shares of common stock outstanding
throughout the year, earnings per share is:
a. $7.00.
b. $4.90. ($490,000 / 100,000 = $4.90)

c. $2.10.
d. No correct answer is given.

Chapter
14-80
 END
CHAPTER 2

Chapter
14-81