Presidential Realty Corporation reports the following regarding its distributions paid
Presidential Realty Corporation reports the following regarding its distributions paid on common stock: "Cash distributions on common stock were charged to paid in surplus because the parent company has accumulated no earnings (other than its equity in undistributed earnings of certain subsidiaries) since its formation."

Required:
a. Explain whether these cash distributions are dividends.
b. Speculate as to why Presidential Realty made such a distribution.

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help