Principles of Financial Accounting · free preview
Dividends and Stock Splits, Recording and Effects
Cash dividends require recording dates that move retained earnings into a payable, property and stock dividends transfer other assets or additional shares, and stock splits multiply shares while leaving every account balance unchanged.
1. Cash dividends and the four dates
Cash dividends and the four dates
2. Property dividends
Property dividends
3. Stock dividends and splits
Stock dividends and splits
4. Why companies choose each
Why companies choose each
5. Declaration entry
A board declares a 50,000 dollar cash dividend. Which entry is made on the declaration date?
6. No-entry dates
Which dividend dates require no journal entry?
7. Stock dividend effect
A company declares a 10 percent stock dividend when its stock trades at 40 dollars and par is 1 dollar. What is the effect on total stockholders equity?
8. Stock split entry
A company executes a 2-for-1 stock split on 100,000 shares of 2 dollar par stock. Which accounting action is required?
9. Cash dividend payable balance
A 50,000 dollar dividend is declared on March 1 and paid on April 15. Compute the dividends payable balance on March 31 in dollars, number only.
10. Split share count
A 3-for-1 split applies to 100,000 outstanding shares. Compute the new share count. Number only.
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