Question

Guoping Limited provides you with the following condensed balance sheet information:
Instructions
(a). For each transaction below, indicate the dollar impact (if any) on the following five items: (1) total assets, (2) common shares, (3) contributed surplus, (4) retained earnings, and (5) shareholders’ equity. (Each situation is independent.)
1. The company declares and pays a $0.50 per share dividend.
2. The company declares and issues a 10% stock dividend when the shares’ market price is $12 per share.
3. The company declares and issues a 40% stock dividend when the shares’ market price is $17 per share.
4. The company declares and distributes a property dividend. The company gives one Geneva share for every two company shares held. Geneva is selling for $12 per share on the date when the property dividend is declared.
5. The company declares a 3-for-1 stock split and issues new shares.
(b). What are the differences between a stock dividend and a cash or property dividend?


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  • CreatedAugust 23, 2015
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