Accounting advanced dividend liquidating

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However, they also have other options for dividend payments, including property dividends, scrip dividends, liquidating dividends and stock dividends.

Stock dividends differ slightly from stock splits, which are characterised by a payment in stock of more than 25% of outstanding shares.

On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for 0,000 cash. Spiel Company reported net income of ,000 and paid dividends of ,000 for both 20X7 and 20X8. The fair value of shares held by Yang was 0,000 and 5,000 on December 31, 20X7 and 20X8 respectively. Based on the preceding information, what amount will be reported by Yang as income from its investment in Spiel for 20X8 if it used the fair value option to account for its investment in Spiel? Eagle’s net income for the year ended December 31, 20X4, was 0,000, earned evenly throughout the year. As a result, Well is able to exercise significant influence over Rea. However, another corporation holds the other 78 percent ownership and does not take Stadium’s wants and wishes into consideration when making financing and operating decisions for Jamestown. During 20X4, South earned ,000 and paid dividends of ,000. Note: This is a Kaplan CPA Review Question Grant, Inc.

On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for 0,000 cash. Spiel Company reported net income of ,000 and paid dividends of ,000 for both 20X7 and 20X8. The fair value of shares held by Yang was 0,000 and 5,000 on December 31, 20X7 and 20X8 respectively. Based on the preceding information, what amount will be reported by Yang as balance in investment in Spiel on December 31, 20X8, if it used the fair value option to account for its investment in Spiel? Which of the following observations is consistent with the equity method of accounting? Dividends declared by the investee are treated as income by the investor. It is used when the investor lacks the ability to exercise significant influence over the investee. On December 15, 20X4, Eagle paid ,000 in dividends to its common stockholders. Well is the largest single shareholder in Rea, and Well’s officers are a majority on Rea’s board of directors. The Stadium Company (Stadium) holds 22 percent of the outstanding voting stock of Jamestown. Grant’s 30 percent interest in South gave Grant the ability to exercise significant influence over South’s operating and financial policies.

If you have any questions, please feel free to contact us. All questions will always be answered in 6 hours., most of the time within 30mins We also faced similar difficulities when we were students, and we understand how you feel. a dividend declared by the investee in excess of its earnings since acquisition by the investor C. On January 1, 20X8, William Company acquired 30 percent of e Gate Company’s common stock, at underlying book value of 0,000. e Gate has 100,000 shares of par value, 5 percent cumulative preferred stock outstanding. e Gate reported net income of 0,000 for 20X8 and paid total dividends of ,000. William uses the equity method to account for this investment. Based on the preceding information, what amount will be reported by Yang as income from its investment in Spiel for 20X8, if it used the equity method of accounting? South paid dividends of ,000 on October 1, 20X5. During 20X4, South earned ,000 and paid dividends of ,000.

But now, with the Advanced Financial Accounting 10th Test Bank, you will be able to * Anticipate the type of the questions that will appear in your exam. Usually, an investment of 20 to 50 percent in another company’s voting stock is reported under the: A. any dividend declared by the investee since acquisition D. e Gate has 100,000 shares of par value, 5 percent cumulative preferred stock outstanding. e Gate reported net income of 0,000 for 20X8 and paid total dividends of ,000. William uses the equity method to account for this investment. Based on the preceding information, what amount would be reported by William Company as the balance in its investment account on December 31, 20X8? What amount should Grant include in its 20X4 income statement as a result of the investment? South reported earnings of 0,000 for the six months ended June 30, 20X5, and 0,000 for the year ended December 31, 20X5.

For a long-term investor, a stock dividend can also be a way of re-investing in a company that may grow and increase equity value in the future.

Most frequently, companies pay cash dividends, which are direct cash payments in accordance to how many shares a shareholder owns.

As with other types of dividends, the fair value of shares issued toward stock dividends is based on their fair market value when the dividend is declared.

Stock dividends may at times be seen as more attractive for investors, as payment in stock dividends is usually not considered taxable income by tax authorities.

Such a reduction of retained earnings can be used as a means of limiting the possibility of future dividend payments.

At the end of each quarter, the company will declare its earnings in its quarterly financial statement.

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