1. What is a stock dividend? Why do you think a company might choose to pay dividends in the form of stock rather than cash?
2. On the date of declaration for a small stock dividend, how is the Stock Dividends Distributable amount calculated? Give me a formula that would calculate this amount.
3. What account would you debit and what account would you credit on the payment date (issuance date) of a small stock dividend?
4. What is treasury stock?
5. Give two reasons why a company would purchase its own stock in the form of treasury stock.
6. What kind of account is the Treasury Stock account (meaning how is it classified)?
7. What is the normal balance of the Treasury Stock account?
8. When is the Paid-in Capital from Sale of Treasury Stock account used?