Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 13, Problem 21E
To determine
Indicate 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:
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
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
Chapter 13 Solutions
Financial Accounting
Ch. 13 - Of two corporations organized at approximately the...Ch. 13 - A stockbroker advises a client to buy preferred...Ch. 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 - A corporation reacquires 60,000 shares of its own...Ch. 13 - The treasury stock in Discussion Question 7 is...Ch. 13 - What are the three classifications of restrictions...Ch. 13 - Prob. 9DQCh. 13 - What is the primary purpose of a stock split?
Ch. 13 - National Furniture Company has 25,000 shares of...Ch. 13 - Prob. 1PEBCh. 13 - On August 26, Mountain Realty Inc. issued for cash...Ch. 13 - Entries for issuing stock On January 22, Zentric...Ch. 13 - The declaration, record, and payment dates in...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Olde Wine Corporation has 250,000 shares of 40 par...Ch. 13 - Entries for stock dividends Antique Buggy...Ch. 13 - Prob. 5PEACh. 13 - Prob. 5PEBCh. 13 - Using the following accounts and balances, prepare...Ch. 13 - Prob. 6PEBCh. 13 - Prob. 7PEACh. 13 - Prob. 7PEBCh. 13 - Prob. 8PEACh. 13 - Prob. 8PEBCh. 13 - Triple Z Inc., a developer of radiology equipment,...Ch. 13 - Dividends per share Lightfoot Inc., a software...Ch. 13 - On April 20, Gallatin County Rocks Inc., a marble...Ch. 13 - On May 15, Helena Carpet Inc., a carpet...Ch. 13 - On July 11, American Lift Corporation, a...Ch. 13 - Prob. 6ECh. 13 - Issuing stock Willow Creek Nursery, with an...Ch. 13 - Occupational Products Inc., a wholesaler of office...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Entries for stock dividends Senior Life Co. is an...Ch. 13 - Mystic Lake Inc. bottles and distributes spring...Ch. 13 - Prob. 12ECh. 13 - Treasury stock transactions Biscayne Bay Water...Ch. 13 - Reporting paid-in capital The following accounts...Ch. 13 - Stockholders Equity section of balance sheet The...Ch. 13 - Stockholders Equity section of balance sheet...Ch. 13 - Sumter Pumps Corporation, a manufacturer of...Ch. 13 - Stockholders Equity section of balance sheet List...Ch. 13 - The stockholders equity T accounts of I-Cards Inc....Ch. 13 - Prob. 20ECh. 13 - Prob. 21ECh. 13 - Selected dividend transactions, stock split...Ch. 13 - Prob. 23ECh. 13 - Pacific Gas and Electric Company is a large gas...Ch. 13 - For a recent year, OfficeMax and Staples are two...Ch. 13 - Sunbird Theatre Inc. owns and operates movie...Ch. 13 - Stock transactions for corporate expansion On...Ch. 13 - The following selected accounts appear in the...Ch. 13 - Morrow Enterprises Inc. manufactures bathroom...Ch. 13 - Selected transactions completed by Primo Discount...Ch. 13 - Prob. 1PBCh. 13 - Prob. 2PBCh. 13 - Selected stock transactions Diamondback Welding ...Ch. 13 - Nav-Go Enterprises Inc. produces aeronautical...Ch. 13 - Prob. 5PBCh. 13 - Prob. 1CPCh. 13 - Prob. 2CPCh. 13 - Prob. 3CPCh. 13 - Prob. 4CPCh. 13 - Prob. 5CP
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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_forwardStockholder Payout Ratios The following information pertains to Milo Mindbender Corporation: Required: Calculate the dividend yield, dividend payout, and total payout. (Note: Round answers to two decimal places.)arrow_forwardThe final distribution of cash to shareholders after a company has been sold off or discontinued operations is called a dividend. A. complete B. liquidating C. stock D. optimalarrow_forward
- Contrast the effects of a cash dividend and a stock dividend on total assets, total liabilities, and total stockholders’ equity.arrow_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_forwardBales 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_forward
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