Retained Earnings. ACCTG 5120 David Plumlee. Retained Earnings. Undistributed Prior Earnings. What items or events decrease RE?. What items or events increase RE?. net losses dividends prior period adj.(error corrections) treasury stock adj. net income prior period adj.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
What items or events decrease RE?
What items or events increase RE?
What are some of the different types of dividends?
Date of declaration-- date dividend declared by Board of Directors
Date of record -- individuals holding stock this date receive dividend
Date of payment -- date dividend is actually paid
What are the important dates for dividends?
What is a property dividend?
Dividends paid in non-cash assets such as stock of another company
How is accounting for Stock Div. Different?
What is a script dividend?
What is a liquidating dividend?
Do stockholders benefit economically from stock dividends?
Why issue a stock dividend?
What makes a stock dividend “small?”
Issuing less than a 20 - 25% stock of the previously outstanding stock
How should you account for small vs. large stock dividends?
For small, the fair value of the stock to be issued is transferred from RE. Large use par value.
2 for 1 Stock Split100% Stock Dividend
What happens to the # of shares?
# shares double # shares double
What happens to the market price?
cut in half cut in half
What JE is made?
Memo only; cut par Entry to transfer r/e
Signal intent to permanently reinvest some firm’s earnings
Why would management choose?
Primary concern: manipulating stock price
Appropriation of retained earnings does not mean that cash will be available
How do you setup appropriated R/E?
How do you eliminate appropriated R/E?
What is a quasi reorganization?
A quasi-reorganization is designed to allow the company to appear to have dissolved, paid of any creditors that want out, and reformed the company without making it go through the expense of actually going through a formal dissolution and reformation.
What is done with the existing asset and liability balances?
Restate them to fair values and adjust RE for the difference.
What is done with the deficit in RE?
Eliminate it against other capital accounts