Stock splits and stock dividends may be used by a corporation to change the number of shares of its stock outstanding. a.    What is meant by a stock split effected in the form of a dividend? b.    From an accounting viewpoint, explain how the stock split effected in the form of a dividend differs from an ordinary stock dividend. c.    How should a stock dividend that has been declared but not yet issued be classified in a balance sheet? Why?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Stock splits and stock dividends may be used by a corporation to change the number of shares of its stock outstanding.

a.    What is meant by a stock split effected in the form of a dividend?

b.    From an accounting viewpoint, explain how the stock split effected in the form of a dividend differs from an ordinary stock dividend.

c.    How should a stock dividend that has been declared but not yet issued be classified in a balance sheet? Why?

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