Stockholders' Equity (F7:M5-6) Flashcards
where are dividends in arrears (undeclared dividends on cum pref stock) reported?
in the footnotes. liability not recorded because undeclared
when a company issues shares of CS in exchange for property, what is the property recorded at (i.e., what is the debit)?
the property (land) is recorded at the market value of the shares issued in exchange for it.
land (d
CS (c
APIC (c
what is the journal entry when a stock dividend is declared (less than 20-25% “small”)?
RE (d = FV at date of declaration
CS (c = Par
APIC (c = Plug
*number of shares awarded x par value
on what date are cash dividends booked as a liability?
date of declaration
RE (d Dividends payable (c
what is a liquidating dividend and what account does it decrease?
its a return of capital rather than a distribution of earnings like a normal dividend. decreases APIC (amount in excess of RE)
is a stock dividend recorded as revenue by the recipient?
no. it increases the number of shares held and decreases the cost basis per share
when a company issues rights to its existing shareholders without consideration, what journal entry must be made?
no entry is required bc there is no consideration given. Only disclosure required
how should the difference between BV and FMV of a property dividend be recorded?
as a G/L on disposal of asset
what is the journal entry when a stock dividend is declared (greater than 20-25% “large”)?
RE (c = Par CS distributable (d = Par
what is the journal entry to record a property dividend?
property dividend (d
asset (at CV) (c
G/L (c or d
