W17-4 KL Corporation, a client, is considering the authorization of a 10% common stock dividend to common stockholders. The financial vice president of KL Corporation wishes to discuss the accounting implications of such an authorization with you before the next meeting of the board of directors. Instructions: (a) The first topic the vice president wishes to discuss is the nature of the stock dividend to the recipient. Discuss the case against considering the stock dividend as income to the recipient. (b) The other topic for discussion is the propriety of issuing the stock dividend to all "stockholders of record" or to "stockholders of record exclusive of shares held in the name of the corporation as treasury stock." Discuss the case against issuing stock dividends on treasury shares
W17-4 KL Corporation, a client, is considering the authorization of a 10% common stock dividend to common stockholders. The financial vice president of KL Corporation wishes to discuss the accounting implications of such an authorization with you before the next meeting of the board of directors. Instructions: (a) The first topic the vice president wishes to discuss is the nature of the stock dividend to the recipient. Discuss the case against considering the stock dividend as income to the recipient. (b) The other topic for discussion is the propriety of issuing the stock dividend to all "stockholders of record" or to "stockholders of record exclusive of shares held in the name of the corporation as treasury stock." Discuss the case against issuing stock dividends on treasury shares
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 10MC
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