he effect of a share dividend is to transfer assets to stockholders assets to contributed capital equity from retained earnings to contributed capital equity from contributed capital to retained earnings

he effect of a share dividend is to transfer assets to stockholders assets to contributed capital equity from retained earnings to contributed capital equity from contributed capital to retained earnings

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 16MCQ

See similar textbooks

Related questions

Q: These are cumulative profits which are retained in the business and not yet distributed to the…

A: We prepare the following financial statements - Income statement Balance sheet Cash flows statement…

Q: A company uses its paid-in capital (in addition to retained earnings) to pay dividends. A company…

Q: When a company issues a stock dividend which of the following would be affected? a. Earnings per…

A: Stock dividends:Stock dividends are the number of shares issued by a company to the existing…

Q: When an investor uses the equity method to account for investments in common stock, cash dividend…

A: 1. Equity method - Under an Equity method of accounting following entries and changes are made every…

Q: Describe the role that dividends and capital gains play in delivering returns to common stock…

A: A dividend is a payment made to stakeholders by a corporation. When a company makes a profit or has…

Q: When accounting for small share dividend, which of the following will be use in recording such…

A: The share dividend is the dividend provided to the shareholders in the form of shares.

Q: Which of the following does not affect accumulated profits? A. Stock dividend B. Share split C.…

A: The share split is a method of decreasing the par value of the stock by increasing the number of…

Q: Which one of the following is a payment of either cash or shares of stock that is paid out of…

A: Retained earnings are the part of the profit left over after payment of all the direct and indirect…

Q: stockholders of a portion of their original investments is a

A: Property dividend is when a company pays dividend to its shareholders in the form of assets.…

Q: Cumulative preferred dividends in arrears should be shown in a corporation's balance sheet as: O A…

A: The cumulative preference shareholders have the right to receive any arrears of dividend also.

Q: When a small, share capital dividend is declared, Retained Earnings is debited for the a. par value…

A: when small share capital dividend is declared, it is recorded at FV of stock as at the declaration…

Q: What is the accounting treatment of the direct issue costs of shares of stocks? Debit to the…

Q: Which of the following would appear first in a statement of retained earnings? a. Net income b.…

A: The ending balance of retained earnings can be calculated by adding net income and deducting…

Q: When a company issues a stock dividend, which of the following would be affected? Group of answer…

A: It is a dividend paid to shareholders in the form of stock rather than cash. Although it might…

Q: Which of the following correctly reflects the effect of dividend? a. On the date of payment of…

A: Solution: Option a, b and c are incorrect due to following: a. On the date of payment of property…

Q: The two basic sources of stockholders’ equity are assets and equity. preferred and common. retained…

A: Stockholder’s equity:It represents the amount of investment made by the owner in the business.

Q: What are the distributions to the stockholders by a firm called? A. retained earnings B. net income…

A: Any Company Typically divides the Profits between itself to the company or it's stock holders.…

Q: similarities and differences between paid in capital and retained earnings?

A: Paid in capital means the amount contributed by share holder in company as share capital Retained…

Q: It is calculated, taking into account the outstanding equity shares of the company A. Conversion…

A: Issue of shares is an important source of finance for the business. Several type of shares can be…

Q: The cost of dividend payable on redeemable preference shares should be included in______. Select…

A: Redeemable preference shares are those preference shares that will be repaid or redeemed after some…

Q: share dividends distributable account balance

A: Share dividends distributable account balance is the amount of share dividends declared and still…

Q: Two sources of capital of common equity are the issuance of new common stock (external) and retained…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: How will you compute outstanding shares? Does it include share premium and retained earnings?

A: Outstanding shares means common shares of the business as on a particular date. For example, a…

Q: The type of dividend that does not affect total assets and total shareholders' equity is a. share…

A: The dividend is the portion of net income which is distributed to shareholders. Dividend payment is…

Q: The declaration of a large share dividend by a corporation will O Increase its share capital O…

A: Dividends are part of profits that are distributed to the shareholders by the company. These…

Q: The two main sources of stockholders' equity are investments by stockholders and dividends pald 9net…

A: Stockholders’ equity: The claims of owners on a company’s resources, after the liabilities are paid…

Q: Stockholders' equity consists of paid-in (or contributed) capital and retained earnings. True or…

A: The stockholder's equity is the remaining amount of assets after paying out its total liabilities.…

Q: When an investor uses the equity method to account for investments in common stock, cash dividend…

A: 1. Equity method - Under an Equity method of accounting following entries and changes are made every…

Q: Share dividends distributable should be classified on the O income statement as an expense.…

A: Introduction;- A dividend is a share of company profits. Which is distributed to to its…

Q: Which of the following is classified as a financing activity? Receipt of dividend income Receipt…

A: The statement of cash flows shows a clear picture of the cash position over a particular period of…

Q: It is the share of profits and retained earnings that a company pays out to its shareholders. * O…

A: Ordinary shares, preference shares and debt capital are three types of sources by which company can…

Q: If the company decides to declare a share dividend instead of cash, explain the effects on the…

A: A company declares share dividend instead of cash dividend if it has low or insufficient cash…

Q: Choose the correct.When an investor uses the equity method to account for investments in common…

A: When an investor uses the equity method to account for investments in common stock, the investor’s…

Q: Which of the following is shown on a statement of cash flows? A share dividend A share split

A: Cash Flow Statement is a statement whic show the movement of cash during the particular financial…

Q: Do you add or subtract total retained earnings with paid in capital when accounting stock?

A: 1. Retained Earnings - Retained Earnings is the retained accumulated profit of the company over the…

Q: A company’s assets and shareholders’ equity are most likely to be increased by Share rights…

A: Stockholder's equity includes a company's cumulative earnings and the amount of capital invested by…

Q: The distribution of a dividend that represents a partial return of the original investment made by…

A: Dividend is the disbursement of profit in consideration to the shares purchased by the shareholders.…

Q: How would a share split affect the amount of total share capital, total shareholder's equity and…

A: Stock split results in division of outstanding shares. Hence, the total number of shares outstanding…

Q: Equity gains are normally ________ to the _________ account. credited; Share Premium debited;…

A: Equity Gain: The Equity gain means it is the Equity share has a par value of $ 100 and it is…

Q: Describe in general the various methods of accounting for an investment in equity shares of another…

Q: The distribution of a dividend that represents a partial return of the original investment made by…

A: Dividends can be paid in a number of different forms, including cash, stocks, and other assets. A…

Q: The declaration of a stock dividend will * O increase paid-in capital. change the total of…

A: Stock dividend will affect: Retaining earnings Common stock Liabilities

Q: Discuss the impact of issuance of share dividends to the existing shareholders. Knowledge)

A: A stockholder is a person who owns stock in a company. Stockholders own a portion of the company. If…

Q: The two main categories of stockholders’ equity area. assets and liabilities.b. retained earnings…

A: Stockholders’ equity presents the capital of the business and earning of the business. Capital of…

Q: Contrast the effects of a cash dividend and a stock dividend on total assets, total liabilities, and…

A: The dividends are the income of the shareholders on their shareholdings in the company.

Question

The effect of a share dividend is to transfer

assets to stockholders

assets to contributed capital

equity from retained earnings to contributed capital

equity from contributed capital to retained earnings

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Meaning of stock dividends

VIEW

Step 2 Effect of a share dividend

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Which of the following measures the portion of a corporations profit allocated to each outstanding share of common stock? A. retained earnings B. EPS C. EBITDA D. NOPAT
Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
Explain the theory behind the dividends-based valuation approach. Why are dividends value-relevant to common equity shareholders?
The total amount of cash and other assets received by a corporation from the stockholders in exchange for the shares is ________. A. always equal to par value B. referred to as retained earnings C. always below its stated value D. referred to as paid-in capital