Liquidating dividend accounting

posted by | Leave a comment

The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to

The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend. Retained Earnings [Cash Dividend Declared] = 2,000,000 [Credit]. Date of record, April 15, 2009 Memorandum entry that the firm will pay a dividend to all stockholders of record as of today, the date of record. Retained Earnings [Property Dividend Declared] = $600,00 [Credit]. The accounting treatment at the date of declaration consists of debiting retained earnings or scrip dividends declared and crediting notes payable to stockholders or scrip dividend payable. Retained Earnings [Scrip Dividends Declared] = 3,000,000 [Credit]. The transaction is made by a capitalization of retained earnings resulting in a reduction of retained earnings and an increase in some contributed capital accounts. Additional Paid-in-Capital from Stock Dividend 30,000 2. Common Stock Dividend Distribution = 120,000 [Credit]. At the date of declaration the bonds had a market value of $600,000. Date of Declaration Investments in Lie Dharma Company [Debit]. Gain on Appreciation of Bonds = 100,000 [$600,000 – $500,000] [Debit]. In such case, firms may elect to declare a “”—by issuing promissory notes requiring them to pay the dividends at a later date. Cash = 2,500,000 A firm with adequate retained earnings but insufficient liquidity may elect to issue “stock dividends” by a pro rate distribution of additional shares of the firm’s own stock to its stockholders. Common Stock Dividend Distributable = 120,000 [Credit].This mainly occurs during voluntary liquidations of solvent corporations.

||

The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].

With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

Retained Earnings [Cash Dividend Declared] = 2,000,000 [Credit]. Date of record, April 15, 2009 Memorandum entry that the firm will pay a dividend to all stockholders of record as of today, the date of record. Retained Earnings [Property Dividend Declared] = $600,00 [Credit]. The accounting treatment at the date of declaration consists of debiting retained earnings or scrip dividends declared and crediting notes payable to stockholders or scrip dividend payable. Retained Earnings [Scrip Dividends Declared] = 3,000,000 [Credit]. The transaction is made by a capitalization of retained earnings resulting in a reduction of retained earnings and an increase in some contributed capital accounts. Additional Paid-in-Capital from Stock Dividend 30,000 2. Common Stock Dividend Distribution = 120,000 [Credit].

At the date of declaration the bonds had a market value of $600,000. Date of Declaration Investments in Lie Dharma Company [Debit]. Gain on Appreciation of Bonds = 100,000 [$600,000 – $500,000] [Debit]. In such case, firms may elect to declare a “”—by issuing promissory notes requiring them to pay the dividends at a later date. Cash = 2,500,000 A firm with adequate retained earnings but insufficient liquidity may elect to issue “stock dividends” by a pro rate distribution of additional shares of the firm’s own stock to its stockholders. Common Stock Dividend Distributable = 120,000 [Credit].

This mainly occurs during voluntary liquidations of solvent corporations.

a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity =

The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend. Retained Earnings [Cash Dividend Declared] = 2,000,000 [Credit]. Date of record, April 15, 2009 Memorandum entry that the firm will pay a dividend to all stockholders of record as of today, the date of record. Retained Earnings [Property Dividend Declared] = $600,00 [Credit]. The accounting treatment at the date of declaration consists of debiting retained earnings or scrip dividends declared and crediting notes payable to stockholders or scrip dividend payable. Retained Earnings [Scrip Dividends Declared] = 3,000,000 [Credit]. The transaction is made by a capitalization of retained earnings resulting in a reduction of retained earnings and an increase in some contributed capital accounts. Additional Paid-in-Capital from Stock Dividend 30,000 2. Common Stock Dividend Distribution = 120,000 [Credit]. At the date of declaration the bonds had a market value of $600,000. Date of Declaration Investments in Lie Dharma Company [Debit]. Gain on Appreciation of Bonds = 100,000 [$600,000 – $500,000] [Debit]. In such case, firms may elect to declare a “”—by issuing promissory notes requiring them to pay the dividends at a later date. Cash = 2,500,000 A firm with adequate retained earnings but insufficient liquidity may elect to issue “stock dividends” by a pro rate distribution of additional shares of the firm’s own stock to its stockholders. Common Stock Dividend Distributable = 120,000 [Credit].This mainly occurs during voluntary liquidations of solvent corporations.

||

The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].

With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

Retained Earnings [Cash Dividend Declared] = 2,000,000 [Credit]. Date of record, April 15, 2009 Memorandum entry that the firm will pay a dividend to all stockholders of record as of today, the date of record. Retained Earnings [Property Dividend Declared] = $600,00 [Credit]. The accounting treatment at the date of declaration consists of debiting retained earnings or scrip dividends declared and crediting notes payable to stockholders or scrip dividend payable. Retained Earnings [Scrip Dividends Declared] = 3,000,000 [Credit]. The transaction is made by a capitalization of retained earnings resulting in a reduction of retained earnings and an increase in some contributed capital accounts. Additional Paid-in-Capital from Stock Dividend 30,000 2. Common Stock Dividend Distribution = 120,000 [Credit].

At the date of declaration the bonds had a market value of $600,000. Date of Declaration Investments in Lie Dharma Company [Debit]. Gain on Appreciation of Bonds = 100,000 [$600,000 – $500,000] [Debit]. In such case, firms may elect to declare a “”—by issuing promissory notes requiring them to pay the dividends at a later date. Cash = 2,500,000 A firm with adequate retained earnings but insufficient liquidity may elect to issue “stock dividends” by a pro rate distribution of additional shares of the firm’s own stock to its stockholders. Common Stock Dividend Distributable = 120,000 [Credit].

This mainly occurs during voluntary liquidations of solvent corporations.

,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at per share. The following journal entries are required at the time of declaration: [Debit].

With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x ] = 300,000 [Credit].

On its books, these shares were recorded at their cost of ,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

Retained Earnings [Cash Dividend Declared] = 2,000,000 [Credit]. Date of record, April 15, 2009 Memorandum entry that the firm will pay a dividend to all stockholders of record as of today, the date of record. Retained Earnings [Property Dividend Declared] = 0,00 [Credit]. The accounting treatment at the date of declaration consists of debiting retained earnings or scrip dividends declared and crediting notes payable to stockholders or scrip dividend payable. Retained Earnings [Scrip Dividends Declared] = 3,000,000 [Credit]. The transaction is made by a capitalization of retained earnings resulting in a reduction of retained earnings and an increase in some contributed capital accounts. Additional Paid-in-Capital from Stock Dividend 30,000 2. Common Stock Dividend Distribution = 120,000 [Credit].

At the date of declaration the bonds had a market value of 0,000. Date of Declaration Investments in Lie Dharma Company [Debit]. Gain on Appreciation of Bonds = 100,000 [0,000 – 0,000] [Debit]. In such case, firms may elect to declare a “”—by issuing promissory notes requiring them to pay the dividends at a later date. Cash = 2,500,000 A firm with adequate retained earnings but insufficient liquidity may elect to issue “stock dividends” by a pro rate distribution of additional shares of the firm’s own stock to its stockholders. Common Stock Dividend Distributable = 120,000 [Credit].

This mainly occurs during voluntary liquidations of solvent corporations.

Cash can only be paid to shareholders if the company's net assets are positive.

Sharon owns 1,000 shares in the Tablet Universe Company and the company just announced that it is paying a liquidating dividend.

Sharon has only received regular dividends before and is not familiar with a liquidating dividend. Regular dividends are distributions of the company's profit that the company pays to its shareholders or owners.

Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.

However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

Leave a Reply

biblical view of carbon dating