Yamada Inc a client is considering the authorization of a
Yamada Inc., a client, is considering the authorization of a 10% ordinary share dividend to ordinary shareholders. The financial vice president of Yamada wishes to discuss the accounting implications of such an authorization with you before the next meeting of the board of directors.

Instructions
(a) The first topic the vice president wishes to discuss is the nature of the share dividend to the recipient. Discuss the case against considering the share dividend as income to the recipient.
(b) The other topic for discussion is the propriety of issuing the share dividend to all “shareholders of record” or to “shareholders of record exclusive of shares held in the name of the corporation as treasury shares.” Discuss the case against issuing share dividends on treasury shares.

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