The directors of Merchant Corporation are considering the issuance of a stock dividend. They have asked you to discuss the proposed action by answering the following questions. Instructions a.    What is a stock dividend? How is a stock dividend distinguished from a stock split (1) from a legal standpoint, and (2) from an accounting standpoint? b.    For what reasons does a corporation usually declare a stock dividend? A stock split? c.    Discuss the amount, if any, of retained earnings to be capitalized in connection with a stock dividend.

answer true or false. please write out complete word TRUE OR FALSE   Common stock carries voting privileges while preferred stock gives up this right to receive a dividend preference________________________. The board of directors who are responsible for dividends creates the liability for dividends on   the declaration date ___________________________. The par value is the minimum arbitrary value set for a company’s shares ___________________. Deferred revenues are liabilities which arise when a company receives cash prior to the performance of a service____________________. A negative characteristic of corporations is double taxation ________________________. Copyrights and patents are intangible assets which require annual amortization___________________.

Which of the following statements related to dividends is incorrect? O Dividends must be paid in the period declared. O Before declaring a dividend, management must consider availability of funds to pay the dividend. O Distributions to owners must be in compliance with the state laws. O Dividends must be declared by the Board of Directors.

Part 1 Which are rights of common stockholders? Check all that apply: The right to a share of dividends paid The right to vote for members of the board of directors The right to vote on major decisions at the annual general meeting The right to receive regular dividends Submit

(short answer)  If you were the Chief Financial Officer of a public company that was issuing new common stock, which type of underwiring would you prefer, and why?

Which of the following statements are true regarding corporations? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. It has many of the same rights as an individual. The sale of shares from one stockholder to another does not impact operations. An exception is when it changes the makeup of directors. Stockholders are expected to hire and fire key executives. It does not end with the death of an owner. Corporate income that is distributed to shareholders is usually taxed twice. Corporations are often subject to fewer regulations than partnerships. The president and vice presidents choose the board of directors.

Companies often invest in the common stock of other corporations. The way we report these investments depends on the nature of the investment and the investor’s motivation for the investment. The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. Required: 1. Obtain the relevant authoritative literature on accounting for a change from the cost method to the equity method for investments in common stock using the FASB Accounting Standards Codification at the FASB website ( asc.fasb.org ). 2. What is the specific citation that describes how to account for a change from the cost method to the equity method for investments in common stock? 3. What are the specific requirements?

1. The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by "small" stock dividends and benefit by the market value of their additional shares. Explain this statement. Is it logical? 2. You are in your second year as an auditor with Dantly and Regis, a regional CPA firm. One of the firm’s long-time clients is Mayberry-Cleaver Industries, a national company involved in the manufacturing, marketing, and sales of hydraulic devices used in specialized manufacturing applications. Early in this year’s audit, you discover that Mayberry-Cleaver has changed its method of determining inventory from LIFO to FIFO. Your client’s expectations is that FIFO is consistent with the method used by some other companies in the industry. Upon further investigation, you discover an executive stock option plan whose term calls for a significant increase in the shares available to executives if net income this year exceeds $44 million. Some quick calculations…