Upon receiving shares of stock from a stock dividend, why should the stockholder not consider the value of the stock as income?
Answer to relevant QuestionsWhat is the effect of a stock dividend or a stock split on book value per share?Mazurka Corporation has 2,000 shares of $100, 8 percent cumulative preferred stock outstanding and 40,000 shares of $1 par value common stock outstanding. In the company’s first three years of operation, its board of ...On August 10, 2014, Geller, Inc.’s board of directors declared a 3-for-1 stock split of its $9 par value common stock, of which 400,000 shares were authorized and 125,000 were issued and outstanding. The market value on ...Sussex Company is authorized to issue 100,000 shares of common stock. On August 1, the company issued 5,000 shares at $25 per share. Prepare journal entries to record the issuance of stock for cash under each of the ...The stockholders’ equity section of Manco Corporation’s balance sheet on December 31, 2014, follows.Contributed capital:Common stock, $2 par value, 250,000 shares authorized, 200,000 shares issued and outstanding ...
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