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) ...

a These cash distributions are not dividends Instead they are retur ...

Presidential Realty Corporation reports the following regarding its distributions paid on common stock : Cash distributions on

Question:

Presidential Realty reports the following regarding its distributions paid on : "Cash distributions on 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.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...