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Related Flashcards
Cards In This Set
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Receipt of stock dividend is not a revenue. It
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Increases the number of shares held and decreases the cost basis per share.
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Dividends payable liability is created on the date of
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Declaration.
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No journal entry is recorded with regards dividend payable on the date of
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Record.
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On dividend payment date, the dividends payable liability is
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Reduced and the cash payment is recorded.
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Cash dividends is a direct deduction form
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Retained earnings on the date of declaration.
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Property dividends are deducted from
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Retained earnings at market value on the date of declaration.
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The cost method of accounting for treasury stock affects the retained earnings only if the shares are sold
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Below cost and the difference exceeds any additional paid-in capital from treasury stock.
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If the state of incorporation protects treasury stock from dilution, stock splits also
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Increases treasury stock.
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If the treasury stock transaction are recorded under the cost method and resale of treasury stock is at price that exceeded it acquisition price,
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None of the treasury stock transactions affects the retained earnings.
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The gain from the resale of treasury stock is calculated as the difference between the
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Resale price and the re-acquisition price.
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Gains from treasury transactions are credited to
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Additional paid in capital-treasury stock account in the balance sheet.
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When stock rights are issued,
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Not entry is made.
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When rights are exercised and stock is issued in excess of par value,
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Common stock and additional paid in capital increases.
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Record date determines who
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Will receive the dividends.
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Payment date determines when dividend
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Checks will be mailed.
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