Stock Dividends and Splits Stock splits and stock dividends may be used by a corporation to change the number of shares of its stock outstanding. Required 1. Explain what is meant by a stock split effected in the form of a dividend. 2. From an accounting viewpoint, explain how a stock split effected in the form of a dividend differs from an ordinary stock dividend. 3. How should a stock dividend that has been declared but not yet issued be classified in a statement of financial position? Why?
Stock Dividends and Splits Stock splits and stock dividends may be used by a corporation to change the number of shares of its stock outstanding. Required 1. Explain what is meant by a stock split effected in the form of a dividend. 2. From an accounting viewpoint, explain how a stock split effected in the form of a dividend differs from an ordinary stock dividend. 3. How should a stock dividend that has been declared but not yet issued be classified in a statement of financial position? Why?
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 14MC: Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a...
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Stock Dividends and Splits
Stock splits and stock dividends may be used by a corporation to change the number of shares of its stock outstanding.
Required
1. Explain what is meant by a stock split effected in the form of a dividend.
2. From an accounting viewpoint, explain how a stock split effected in the form of a dividend differs from an ordinary stock dividend.
3. How should a stock dividend that has been declared but not yet issued be classified in a statement of financial position? Why?
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