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Chapter 13: Q13RQ (page 707)

What are the three relevant dates involving cash dividends? Describe each.

Short Answer

Expert verified

The three important dates including cash dividends are the declaration date, date of record, and the date of payment.

Step by step solution

01

Introduction to the topic

Cash dividends are the most widely recognized type of payment and are paid out in cash the corporate possesses to the stockholders.

Such dividends are a type of investment income of the shareholder, usually treated as acquired in the year they are paid.

02

The three relevant dates involving cash dividends-

1. Declaration date:

On the date of declaration, the board of directors of the corporation announces the intention to pay the dividend. The cash dividend declaration creates an obligation for the corporation.


2. Recording date:

The recording date is the date on which the corporation records which stockholders get dividend checks.


3. Payment date:

It is the date on which the actual payment of dividends is made to the stockholders. Dividend payment generally follows the record date by possibly a week or two.

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Most popular questions from this chapter

Journalizing issuance of stock and preparing the stockholders鈥� equity section of the balance sheet

The charter for ASAP-TV, Inc. authorizes the company to issue 100,000 shares of \(5, no-par preferred stock and 500,000 shares of common stock with \)1 par value. During its start-up phase, ASAP-TV completed the following transactions:

Sep. 6 Issued 550 shares of common stock to the promoters who organized the corporation, receiving cash of \(16,500.

12 Issued 400 shares of preferred stock for cash of \)23,000.

14 Issued 1,500 shares of common stock in exchange for land with a market value of $17,000.

Requirements

1. Record the transactions in the general journal.

If stock is issued for assets other than cash describe the recording of this transaction

Eates Corp. issued 8,000 shares of no-par common stock for $13 per share.

Requirements

2. Which type of stock results in more total paid-in capital?

Question: Journalizing issuance of stock鈥攁t par and at a premium

Colorado Corporation has two classes of stock: common, \(3 par value; and preferred, \)30 par value.

Requirements

2. Journalize Colorado鈥檚 issuance of 4,500 shares of preferred stock for a total of $135,000

What does the statement of stockholders鈥� equity report? How does the statement of stockholders鈥� equity differ from the statement of retained earnings?
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