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Accounting Principles - Standalone book
12th Edition
ISBN: 9781118875056
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Question
Chapter 14, Problem 1Q
(a)
To determine
Dividend: The amount that shareholders receive in
To explain: The concept of the dividend.
(a)
Expert Solution
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Answer to Problem 1Q
The distribution of net income of the company to the shareholders in return for their investment is the dividend.
Explanation of Solution
- The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
- The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.
Conclusion
Thus, the amount that shareholders receive in return of their investment is the dividend.
(b)
To determine
To explain: The payment of a dividend in cash or kind.
(b)
Expert Solution
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Answer to Problem 1Q
It is not always compulsory that dividend must be paid in cash.
Explanation of Solution
- The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
- Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
- When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
- The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.
Conclusion
Thus, the payment of dividend is not always in cash.
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Chapter 14 Solutions
Accounting Principles - Standalone book
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - Prob. 3QCh. 14 - Prob. 4QCh. 14 - Prob. 5QCh. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - Prob. 8QCh. 14 - Prob. 9QCh. 14 - Prob. 10Q
Ch. 14 - Prob. 11QCh. 14 - Prob. 12QCh. 14 - Prob. 13QCh. 14 - Prob. 14QCh. 14 - Prob. 15QCh. 14 - Prob. 16QCh. 14 - Prob. 17QCh. 14 - Prob. 18QCh. 14 - Prob. 14.1BECh. 14 - BE14-2 M. Bot Corporation has 10,000 shares of 8%,...Ch. 14 - Prob. 14.3BECh. 14 - BE14-5 For the year ending December 31, 2017, Soto...Ch. 14 - BE14-6 The balance in retained earnings on January...Ch. 14 - BE14-7 SUPERVALU, one of the largest grocery...Ch. 14 - Prob. 14.8BECh. 14 - BE14-9 The following informal ion is available for...Ch. 14 - Prob. 14.10BECh. 14 - Prob. 14.11BECh. 14 - Prob. 14.1DIECh. 14 - Prob. 14.2DIECh. 14 - DO IT! 14-3 Foley Corporation has retained...Ch. 14 - Prob. 14.4DIECh. 14 - Prob. 14.1ECh. 14 - Prob. 14.2ECh. 14 - Prob. 14.3ECh. 14 - Prob. 14.4ECh. 14 - Prob. 14.5ECh. 14 - E14-8 On January 1, 2017, Eddy Corporation had...Ch. 14 - E14-9 Newland Company reported retained earnings...Ch. 14 - Prob. 14.10ECh. 14 - Prob. 14.11ECh. 14 - E14-12 The following information is available for...Ch. 14 - E14-13 In 2017 Pennington Corporation had net...Ch. 14 - Prob. 14.14ECh. 14 - Prob. 14.15ECh. 14 - Prob. 14.16ECh. 14 - Prob. 14.17ECh. 14 - Prob. 14.1APCh. 14 - Prob. 14.2APCh. 14 - Prob. 14.3APCh. 14 - Prob. 14.4APCh. 14 - Prob. 14.5APCh. 14 - BYP14-1 The financial statements of Apple Inc. are...Ch. 14 - BYP14-2 PepsiCo’s financial statements are...Ch. 14 - BYP14-3 Amazon.com. Inc.’s financial statements...Ch. 14 - Prob. 14.4BYPCh. 14 - Prob. 14.5BYPCh. 14 - BYP14-6 In the past year, Gosser Corporation...Ch. 14 - Prob. 14.7BYPCh. 14 - BVP14-8 In this textbook, you learned that in...Ch. 14 - Prob. 14.1IFRSCh. 14 - 3. Under IFRS, a statement of comprehensive income...Ch. 14 - Prob. 14.4IFRS
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Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License