Accounting Principles, Volume 2: Chapters 13 - 26
Accounting Principles, Volume 2: Chapters 13 - 26
12th Edition
ISBN: 9781118978764
Author: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
Publisher: WILEY
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Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

(a)

Expert Solution
Check Mark

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
Check Mark

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, Volume 2: Chapters 13 - 26

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