P1.A.2.8 Equity Transactions

Question 1

Large Stock Dividend

P1.A.2.8 Equity Transactions

Answer 1

1. > 25% of total outstanding shares
2. Accounted for using par value method
3. Stock dividends issued: comes from retained earnings

Question 2

Small Stock Dividend

P1.A.2.8 Equity Transactions

Answer 2

1. <= 25% of total outstanding shares
2. Accounted for using fair value method: excess applied to additional paid in capital
3. Stock dividends issued: comes from retained earnings