7252569-MIdterm-1 (dragged) 43

7252569-MIdterm-1 (dragged) 43 - Kieso Weygandt Warfield...

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Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 15-9 to share capital. When the stock dividend is "paid," the appropriate share capital account is credited, and the common stock dividend distributable account is debited. Liquidating Dividends 30. Some companies’ use contributed surplus as a basis for dividends. Dividends based on other than retained earnings are described as liquidating dividends. This implies that they are a return of the shareholder’s investment rather than of profits. Stock Split 31. A stock split results in an increase (or decrease if a reverse split) in the number of shares outstanding. No accounting entry is required for a stock split, as the total dollar amount of all shareholders' equity accounts remains unchanged. A stock split is usually intended to improve the marketability of the shares by reducing the market price of the stock being split. In general, the difference between a stock split and a stock dividend is based upon
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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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