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- How does the accounting for a liquidating dividend differ from that for a normal cash dividend?a. Where should a declared but unpaid cash dividend be reported on the balance sheet?b. Where should a declared but unissued stock dividend be reported on the balance sheet?Why is the term liquidating dividend used to describe cash dividends debited against paid-in capital accounts?
- 1) Explain with a numerical example the advantages of stock repurchase compared to regular cash dividend.In the absence of market imperfections and taxes, stock repurchases are sameas cash dividends. How does this change in real world circumstances and whateffect does a stock repurchase announcement have on stock price?For the transaction of the purchase of common stock, why are we debiting cash and crediting the common stock? Would you not reverse this transaction, if so the retained earnings are also incorrect.
- Explain the advantages of stock repurchase compared to regular cash dividend.The dividend to general unsecured creditors is the dividend rate declared on common stock multiplied by the amount due to unsecured creditors. True of FalseTrue or False: Dividends declared and paid result in a decrease to the common stock's account balance. Select one: True False
- What is the difference between a cash dividend and a stock dividend?Would a typical common stock provide cash flows like an annuity or more like an uneven cash flow stream?When treasury stock is sold below cost, the Paid-in Capital, Treasury Stock account is debited for the excess of the cost the selling price but not to exceed the credit balance. True or False True False
