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Business Accounting Connect Access Card for Financial Accounting: Information and Decisions

Stock dividend refers to the number of shares paid by the company to the shareholders on their investment in the company. The stock dividend is distributed by the company when there is less availability of cash in the company or the company has to use cash in other projects. To explain: The reason for not considering the stock dividend as taxable income. Courts have ruled that stock dividend is not taxable income for shareholders. Following justifies is: When a shareholder receives a stock dividend, the number of shares of shareholders increases but the value of shares remains the same. The per-share value of shares gets reduces. The stock dividend does not increase the value of shares and it does not give cash benefits to its owner. Tax is charged on cash income. As the shareholder does not receive any cash benefits, the tax is not chargeable on the stock dividend.

Stock dividend refers to the number of shares paid by the company to the shareholders on their investment in the company. The stock dividend is distributed by the company when there is less availability of cash in the company or the company has to use cash in other projects. To explain: The reason for not considering the stock dividend as taxable income. Courts have ruled that stock dividend is not taxable income for shareholders. Following justifies is: When a shareholder receives a stock dividend, the number of shares of shareholders increases but the value of shares remains the same. The per-share value of shares gets reduces. The stock dividend does not increase the value of shares and it does not give cash benefits to its owner. Tax is charged on cash income. As the shareholder does not receive any cash benefits, the tax is not chargeable on the stock dividend.

Solution Summary: The author explains that stock dividend is not taxable income for shareholders, since it does not increase the value of shares or give cash benefits to its owner.

Connect Access Card for Financial Accounting: Information and Decisions

Connect Access Card for Financial Accounting: Information and Decisions

8th Edition

ISBN: 9781259662966

Author: John J Wild

Publisher: McGraw-Hill Education

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Chapter 11, Problem 13DQ

Chapter 11, Problem 15DQ

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Chapter 11 Solutions

Connect Access Card for Financial Accounting: Information and Decisions

Ch. 11 - Prob. 1DQ Ch. 11 - How are organization expenses reported?Ch. 11 - Prob. 3DQ Ch. 11 - What is the difference between authorized shares...Ch. 11 - Prob. 5DQ Ch. 11 - Prob. 6DQ Ch. 11 - Prob. 7DQ Ch. 11 - Prob. 8DQ Ch. 11 - Prob. 9DQ Ch. 11 - Prob. 10DQ

Ch. 11 - Prob. 11DQ Ch. 11 - Prob. 12DQ Ch. 11 - What is the didfference between a stock dividend...Ch. 11 - Prob. 14DQ Ch. 11 - Prob. 15DQ Ch. 11 - Prob. 16DQ Ch. 11 - Prob. 17DQ Ch. 11 - Prob. 18DQ Ch. 11 - Prob. 19DQ Ch. 11 - Prob. 20DQ Ch. 11 - Prob. 21DQ Ch. 11 - Prob. 22DQ Ch. 11 - Prob. 1QS Ch. 11 - Prob. 2QS Ch. 11 - Prob. 3QS Ch. 11 - Prob. 4QS Ch. 11 - Prob. 5QS Ch. 11 - Prob. 6QS Ch. 11 - Prob. 7QS Ch. 11 - Prob. 8QS Ch. 11 - Prob. 9QS Ch. 11 - Prob. 10QS Ch. 11 - Prob. 11QS Ch. 11 - Prob. 12QS Ch. 11 - Prob. 13QS Ch. 11 - Prob. 14QS Ch. 11 - Prob. 15QS Ch. 11 - Prob. 16QS Ch. 11 - Dividend yield A3 Foxburo Company expects to pay a...Ch. 11 - Prob. 18QS Ch. 11 - Prob. 19QS Ch. 11 - Prob. 1E Ch. 11 - Prob. 2E Ch. 11 - Prob. 3E Ch. 11 - Prob. 4E Ch. 11 - Prob. 6E Ch. 11 - Prob. 7E Ch. 11 - York’s outstanding stock consists of 80,000 shares...Ch. 11 - Use the data in Exercise 118 to determine the...Ch. 11 - Prob. 10E Ch. 11 - Prob. 11E Ch. 11 - Prob. 12E Ch. 11 - Prob. 13E Ch. 11 - Prob. 14E Ch. 11 - Prob. 15E Ch. 11 - Prob. 16E Ch. 11 - Prob. 17E Ch. 11 - Prob. 18E Ch. 11 - Prob. 1PSA Ch. 11 - Prob. 2PSA Ch. 11 - Prob. 3PSA Ch. 11 - Prob. 4PSA Ch. 11 - Prob. 5PSA Ch. 11 - Prob. 1PSB Ch. 11 - Prob. 2PSB Ch. 11 - Prob. 3PSB Ch. 11 - Prob. 4PSB Ch. 11 - Refer to Apples financial statements in Appendix A...Ch. 11 - Prob. 2BTN Ch. 11 - Harriet Moore is an accountant for New World...

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