This comment appeared in the annual report of Mac-Cloud Inc.: “The Company could pay cash or propertydividends on the Class A common stock without payingcash or property dividends on the Class B common stock.But if the Company pays any cash or property dividendson the Class B common stock, it would be required to payat least the same dividend on the Class A common stock.”How is a property dividend accounted for in the financialrecords?

This comment appeared in the annual report of Mac-Cloud Inc.: “The Company could pay cash or propertydividends on the Class A common stock without payingcash or property dividends on the Class B common stock.But if the Company pays any cash or property dividendson the Class B common stock, it would be required to payat least the same dividend on the Class A common stock.”How is a property dividend accounted for in the financialrecords?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 14MCQ

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This comment appeared in the annual report of MacCloud Inc.: “The Company could pay cash or property dividends on the Class A common stock without paying cash or property dividends on the Class B common stock. But if the Company pays any cash or property dividends on the Class B common stock, it would be required to pay at least the same dividend on the Class A common stock.” How is a property dividend accounted for in the financial records?
Boehn Corporation accounts for its investment in the common stock of Sells Company under the equity method, since they exert significant influence. Boehn Corporation should ordinarily record a cash dividend received from Sells as a. a reduction of the carrying value of the investment. b. additional paid-in capital. c. an addition to the carrying value of the investment. d. dividend income.
The 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 capital
To calculate diluted EPS, the accountant does all of the following except:adds back to net income any compensation expense recognized on the employee stockoptionsadds back any interest expense (net of taxes) on convertible bondsadds back any dividends on convertible preferred stock the firm subtracted in computingnet income to common shareholders.enters only the net incremental shares issued (shares issued under options minus assumedshares repurchased) in the computation of diluted EPS.
i) Central to the previous calculations of company valuations are the payment of dividends. The following terms relating to dividend payment chronology. Define each term in a single sentence • Ex-dividend date• Record date • Declaration date• Payment date • Cum-dividend period ii) Give two reasons why a company my distribute cash to shareholders via a buyback rather than a dividend
For the following three situations: A company uses its paid-in capital (in addition to retained earnings) to pay dividends. A company distributes another company’s shares as dividends. A company distributes its own shares as dividends. What types of dividends are involved, respectively? Enter 1, 2, 3, or 4 that represents the correct answer. 1. property dividends, stock dividends, liquidating dividends, respectively. 2. property dividends, liquidating dividends, stock dividends, respectively. 3. liquidating dividends, property dividends, stock dividends, respectively. 4. liquidating dividends, stock dividends, property dividends, respectively.
Indicate whether the following statements are true or false. If the statementis false, explain why.a. If a firm repurchases its stock in the open market, the shareholders whotender the stock are subject to capital gains taxes.
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 earnings
For accounting purposes, the method used to account for investments in common stock is determined by: a. the amount paid for the stock by the investor b. whether the acquisition of the stock by the investor was "friendly" or "hostile" c. the extent of an investor's influence over the operating and financial affairs of the investee d. whether the stock has paid dividends in past years
A company’s dividend policy refers to the manner in which a firm distributes its earnings to shareholders. Firms can pay out cash in one of two ways: a dividend or a share repurchase. Before 1983, stock repurchases were fairly rare, but today they are common. When a firm decides to pay a dividend, it usually follows the following process. Several critical dates play a role in the dividend payment procedure. In the following table, identify the critical dividend dates. Check boxes that apply for each: Declaration Date Ex-Dividend Date Payment Date Holder-of-Record Date Dividend checks are sent to shareholders. Shares purchased on or after this date do not entitle investors to the stock’s dividend. All shareholders as of this date will be mailed a dividend check. The firm announces its intention to pay a dividend.
If instead of issuing a cash dividend a company instead issues a stock dividend, what is the impact to the shareholders? Do they need to report anything that year on their tax return for the dividend and why might a shareholder like getting a stock dividend instead of cash?
How should a "gain" from the sale of treasury stock be reflected when using the cost method of recording treasury stock transactions? Choices; As ordinary earnings shown on the income statement. As an increase in the amount shown for common stock. As treasury shares premium As an extraordinary item shown on the income statement.