Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 13, Problem 13.12EX
To determine
Stock Splits: It is a method of increasing the total number of outstanding shares thereby, reducing the market price of each share, however, keeping the corporation’s total market value constant.
Stock Dividends: It refers to the payment of the dividend to its shareholders by the corporation in the form of shares rather than cash is referred as stock dividend.
To indicate: The whether each of the events related to cash dividend and stock split would increase (+), decrease (–), or not affect (0) the total assets, liabilities, and
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Effect of cash dividend and stock splitIndicate whether the following actions would (+) increase. (-) decrease,or (0) not affect Indigo Inc.'s total assets, liabilities, and stockholdersequity:
How does the declaration of a cash dividend affect a company’s assets, liabilities, and equity?a. It results in an increase to liabilities and a decrease to stockholders’ equity, while assetsremain the same.b. It results in an increase to liabilities and a decrease to assets, while stockholders’ equityremains the same.c. It results in an increase to assets and a decrease to liabilities, while stockholders’ equityremains the same.d. It results in an increase to stockholders’ equity and a decrease to assets, while liabilitiesremain the same
Declaration of a cash dividend on common stock affects cash flows from operating activities under the direct and indirect methods as follows:
Direct Method
Indirect Method
Question 209 options:
a
Inflow
Inflow
b
Outflow
Inflow
c
Outflow
Outflow
d
No effect
No effect
Chapter 13 Solutions
Accounting
Ch. 13 - Of two corporations organized at approximately the...Ch. 13 - Prob. 2DQCh. 13 - A corporation with both preferred stock and common...Ch. 13 - An owner of 2,500 shares of Simmons Company common...Ch. 13 - Prob. 5DQCh. 13 - What is the primary purpose of a stock split?Ch. 13 - Prob. 7DQCh. 13 - The treasury stock in Discussion Question 7 is...Ch. 13 - What are the three classifications of restrictions...Ch. 13 - Indicate how prior period adjustments should he...
Ch. 13 - A Dividends per share Reinhardt Furniture Company...Ch. 13 - Dividends per share Zero Calories Company has...Ch. 13 - Entries for issuing stock On May 23, Stoltz Realty...Ch. 13 - Entries for issuing stock On January 22, Zentric...Ch. 13 - Prob. 13.3APECh. 13 - Entries for cash dividends The declaration,...Ch. 13 - Prob. 13.4APECh. 13 - Entries for stock dividends Antique Buggy...Ch. 13 - Prob. 13.5APECh. 13 - Entries for treasury stock On May 27, Hydro...Ch. 13 - Reporting stockholders' equity Using the following...Ch. 13 - Reporting stockholders' equity Using the following...Ch. 13 - Retained earnings statement Rockwell Inc. reported...Ch. 13 - Retained earnings statement None Cruises Inc....Ch. 13 - Earnings per share Financial statement data for...Ch. 13 - Earnings per share Financial statement data for...Ch. 13 - Dividends per share Imaging Inc., a developer of...Ch. 13 - Dividends per share Lightfoot Inc., a software...Ch. 13 - Prob. 13.3EXCh. 13 - Prob. 13.4EXCh. 13 - Issuing stock for assets other than cash On April...Ch. 13 - Prob. 13.6EXCh. 13 - Issuing stock Willow Creek Nursery, with an...Ch. 13 - Issuing stock Work Place Products Inc., a...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Prob. 13.10EXCh. 13 - Prob. 13.11EXCh. 13 - Prob. 13.12EXCh. 13 - Prob. 13.13EXCh. 13 - Prob. 13.14EXCh. 13 - Treasury stock transactions Lawn Spray Inc....Ch. 13 - Prob. 13.16EXCh. 13 - Reporting paid-in capital The following accounts...Ch. 13 - Stockholders' Equity section of balance sheet The...Ch. 13 - Prob. 13.19EXCh. 13 - Retained earnings statement Sumter Pumps...Ch. 13 - Prob. 13.21EXCh. 13 - Statement of stockholders' equity The...Ch. 13 - EPS Junkyard Am, Inc., had earnings of 516,000 for...Ch. 13 - Prob. 13.24EXCh. 13 - EPS Caterpillar Inc. and Deere Company are two...Ch. 13 - Prob. 13.1APRCh. 13 - Prob. 13.2APRCh. 13 - Selected stock transactions The following selected...Ch. 13 - Entries for selected corporate transactions Morrow...Ch. 13 - Entries for selected corporate transactions...Ch. 13 - Prob. 13.1BPRCh. 13 - Stock transaction for corporate expansion Pulsar...Ch. 13 - Selected stock transactions Diamondback Welding ...Ch. 13 - Entries for selected corporate transactions Nav-Go...Ch. 13 - Entries for selected corporate transactions West...Ch. 13 - Prob. 13.1CPCh. 13 - Prob. 13.2CPCh. 13 - Communication Motion Designs Inc. has paid...Ch. 13 - Prob. 13.5CPCh. 13 - Prob. 13.6CP
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Similar questions
- When treasury stock is purchased for cash at more than its par value, what is the effect on total shareholders equity under each of the following methods?arrow_forwardWhich 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.arrow_forwardThe 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 capitalarrow_forward
- How does the accounting for a liquidating dividend differ from that for a normal cash dividend?arrow_forwardhe final distribution of cash to shareholders after a company has been sold off or discontinued operations is called a/an ________ dividend. complete liquidating stock optimalarrow_forwardBMJ company inc. plans to issue new common shares in order to increase its cash and cash equivalents and to finance its growth. Indicate the effect of this transaction on each of the following ratios by putting an "X" in the appropriate box: Augmentation/ Increase Diminution/Reduction/Decrease No effectThe cash ratio Total asset turnover The profitability of shareholders' equity The ratio of total liabilities to total assetsarrow_forward
- Bales Company is preparing a statement of cash flows. Which of the following would be shown on the statement? Question content area bottom Part 1 A. Stock dividend B. Stock split C. Appropriation of retained earnings D. None of the answer choices are correctarrow_forwardIndicate whether the following actions would (+) increase, (–) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity. Stockholders' Assets Liabilities Equity (a) Declaring a cash dividend _______ _______ _______ (b) Paying the cash dividend declared in (a) _______ _______ _______ (c) Declaring a stock dividend _______ _______ _______ (d) Issuing stock certificates for the stock dividend declared in (c) _______ _______ _______ Question 10 options:arrow_forwardIndicate whether statements regarding dividends is true or false. Cash and stock dividends reduce retained earnings.arrow_forward
- Which one of the following is a payment of either cash or shares of stock that is paid out of earnings to a firm's shareholders? Interest Distribution Dividend retained earningsarrow_forwardWhen treasury stock accounted for by the cost method is subsequently sold for more than its purchase price, the excess of the cash proceeds over the carrying value of the treasury stock should be recognized as: a.an increase in retained earnings b.income from continuing operations c.an ordinary gain d.an increase in additional paid-in capitalarrow_forward
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