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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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17. Describe two ways corporations make payouts to stockholders.

To determine

Concept introduction:

Cash dividend:

The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two journal entries made, one at the time of declaration of dividend and another at the time of payment.

Stock Dividend:

The Stock dividend is the number of shares given as dividend to the shareholders. The Stock dividend is declared first and shares are issued later. There are two journal entries made, one at the time of declaration of stock dividend and another at the time of issuance of shares.

To indicate:

Two ways in which company can payout its stockholders.

Explanation

A Company can pay to its stockholders either by way of paying the cash dividends or by issuing the stock dividends.

The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two journal entries made, one at the time of declaration of dividend and another at the time of payment...

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