Property dividend should be
Recorded in retain earnings at the property’s market value at date of declaration
Retain earnings are recorded by
Taking the beginning retain earnings, add the net income and subtracting the stock dividend
What are common stocks recorded as?
They are recorded at par value
The proceeds in excess of stock’s par value is credit to
Additional paid in capital at the time the rights are exercied
If stock dividend is over 20-20%
It’s considered a large stock dividend thus reduces retain earnings by the par value
A liquidating dividend is a return of
Capital (that decreased APIC) and not a distribution of earnings (decrease RE)
Reduce APIC and RE
If a stock dividend is under 20-25%
It’s considered a small stock dividend and would be recorded at Fair value
Thus reduces RE and if FV is over par , it increases APIC
The net of stockholders’ equity would
Not change, it will only change retain earnings
When calculating. The stock dividend
Make sure to subtract the treasury stock out from the common stocks
Calendar year end means
It ends at December 31
When a property dividends is declared and the market value of the property exceeds its book value
The excess would increase net income for the period, no change in APIC
When a company issues rights without consideration (giving rights for free)
No changes and no Jornal entry is recorded at the time of issuance
Dividends declared and paid in assets other than cash are recorded by
Distributing corporation at Fair Market Value at date of declaration
Stock dividend and stocks splits are not
Income to the recipients, thus are not recorded at FMV, but move the investment account balance
The declaration date is the date that
The board of directors formally approves a dividend
To calculate the new par value
Divide the total par value and the number of shares
