How does a cash dividend affect a company's financial statements?
The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to Solaris, Inc. has 2,000 shares of 5%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017.
How much did Carter purchase for treasury stock and equipment?
Carter also purchased treasury stock, equipment, and a patent for$21 million, $25 million, and$12 million, respectively. What amount should Carter report as net cash from investing activities? Verified answer ACCOUNTING The following income statement and balance sheets for The Athletic Attic are provided.
When was the 10% stock dividend issued to stockholders?
On June 1, the corporation acquired 10,000 shares of stock to be held in the treasury. On December 1, when the market price of the stock was $8, the corporation declared a 10% stock dividend to be issued to stockholders of record on December 16, 2010.
What did Carter containers sell for $30 million?
Carter Containers sold marketable securities, land, and common stock for $30 million,$15 million, and $40 million, respectively. Carter also purchased treasury stock, equipment, and a patent for$21 million, $25 million, and$12 million, respectively. What amount should Carter report as net cash from investing activities? Verified answer ACCOUNTING
Why is 10% stock dividend recorded on date of record?
The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified. False. A 10% stock dividend will increase the number of shares outstanding but the par value per share will stay the same. True.
Who is obligated to declare dividends?
The board of directors is obligated to declare dividends.
How to calculate earnings per share?
Earnings per share is calculated by dividing net income by the weighted-average number of shares of preferred stock and common stock outstanding.
What happens if you pay 10% dividends?
A 10% stock dividend will increase the number of shares outstanding but the par value per share will stay the same.
What is liquidating dividend?
Approval of stockholders. If a corporation declares a dividend based upon paid-in capital, it is known as a. liquidating dividend. The date on which a cash dividend becomes a binding legal obligation is on the. declaration date. The effect of the declaration of a cash dividend by the board of directors is to.
What is retained earnings statement?
A retained earnings statement shows the same information as a corporation income statement.
What does earnings per share mean?
Earnings per share indicates the net income earned by each share of outstanding common stock.
What is the declaration date of a dividend?
a. First, the declaration date is the date the board of directors formally declares the dividend. This is the most important date in terms of the effect on the firm's resources and therefore its balance sheet. At this date, the firm recognizes a liability and a reduction in retained earnings.
What is dividend in arrears?
Dividends in Arrears -- Unpaid dividends for a particular year on cumulative preferred stock. Dividends are not required to be paid but are said to accumulate if unpaid. However, no liability is recognized for dividends in arrears until there has been a dividend declaration. The cumulative feature of preferred stock simply means in the event of a dividend declaration, preferred shareholders are entitled to be paid the dividends in arrears before any distribution related to the current period occurs. Dividends in arrears are disclosed in the footnotes.
Why is a scrip dividend first distributed in note payable?
A scrip dividend is first distributed in note payable (scrip) form because the firm does not have the cash at the date of declaration to pay the dividend but wants to assure the shareholders that the dividend is forthcoming. A. Interest Paid -- Interest is paid on the note until cash is paid.
What is retained earnings?
Retained earnings 30,000. Retained earnings is used first as a source of capital for the dividend ($30,000 of the $40,000 total dividend). The remaining $10,000 reduces additional paid-in capital and is a liquidating dividend.
What is stock dividend?
A stock dividend is a permanent capitalization of retained earnings to contributed capital. Stock dividends are made in lieu of cash dividends. Small stock dividends (those less than 20% to 25%) are capitalized at the market value of the shares issued. Pott Co. owned shares in Rose Co.
What is a non cash dividend?
1. In this type of dividend, the distribution of earnings will take the form of a non-cash distribution. In other words, a non-cash asset will be distributed to the shareholders. The most common type of asset distributed in a property dividend is an investment in securities of other firms.
When did Nilo issue dividends?
On December 1, 2005, Nilo Corp. declared a property dividend of marketable securities to be distributed on December 31, 2005, to stockholders of record on December 15, 2005. On December 1, 2005, the marketable securities had a carrying amount of $60,000 and a fair value of $78,000.