Of shareholders equity if the cash received exceeds

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of shareholders' equity. If the cash received exceeds the cost of the reissued treasury stock, it records the excess asan increase in additional paid-in capital from treasury stock. If the cash is less than the cost, it records the "deficit" asa reduction of additional paid-in capital from treasury stock. If the additional paid-in capital from treasury stock isinsufficient to absorb the deficit, the corporation records the remainder as a reduction in retained earnings.
May 14: You should account for a small stock dividend by transferring from retained earnings to contributed capital anamount equal to the fair value of the additional shares issued.
June 4: A corporation records the declaration of a cash dividend by debiting retained earnings and crediting dividendspayable. It records the payment by debiting dividends payable and crediting cash.
July 5: A corporation records the declaration of a cash dividend by debiting retained earnings and crediting dividendspayable. It records the payment by debiting dividends payable and crediting cash.
July 20: From an accounting standpoint, a stock split has no dollar effect on any element of the corporation'sshareholders' equity. Consequently, a stock split has no effect on total shareholders' equity. A corporation ordinarilyrecords a stock split by a memorandum entry that indicates the new par value, the total number of shares issued, andthe impact (if any) on the number of authorized shares.July 20: Memorandum entry: On this date, the common stock was split two for one and the par value was reducedfrom $5 to $2.50 per share. The number of issued common shares increased from 37,370* to 74,740. The number oftreasury shares increased from 300 to 600, and the cost decreased to $10 per share.
Aug. 3: When investment securities are distributed as a property dividend, you should revalue the investment accountto its current fair value on the declaration date and record the dividend obligation at this value so that the amounts of

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Term
Fall
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Balance Sheet, Generally Accepted Accounting Principles

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