7252569-MIdterm-1 (dragged) 42

7252569-MIdterm-1 (dragged) 42 - Kieso Weygandt Warfield...

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Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 15-8 distribution. When a property dividend is declared, fair market value should be recognized in the accounts with the appropriate gain or loss recorded. The fair market value then serves as the basis used in accounting for the property dividend. For example, if a corporation held shares of another company that it intended to distribute to its shareholders as a property dividend, it would first be required to make sure the carrying amount reflected current market value. If on the date the dividend was declared the difference between the cost and market value of the shares to be distributed was $75,000, the following additional entry would be made. Investment in Securities 75,000 Gain on Appreciation of Securities 75,000 Scrip Dividends 26. Scrip dividends are normally declared when the corporation has a sufficient credit balance in retained earnings but is short of cash. When a scrip dividend is declared, a
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This note was uploaded on 03/28/2012 for the course ACCTG ACC423 taught by Professor Smith during the Spring '10 term at University of Phoenix.

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