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【正文】 eive a dividend ? Date of payment—date when the dividend is actually distributed to stockholders 1366 Cash Dividends ABC Corporation declares a $100,000 dividend。 the following journal entries should be made: Declaration of Dividend: Dividends (or Retained Earnings) 100,000 Dividends Payable 100,000 Payment of Dividend: Dividends Payable 100,000 Cash 100,000 1367 Property Dividends ? A property dividend is a distribution to stockholders that is payable in some asset other than cash. ? Bigler Corporation owns 100,000 shares in TriState Oil Co, carrying value $2,700,000, current market value $3,000,000, or $30 per share. There are 1,000,000 shares of Bigler stock outstanding. A dividend of 1/10 of a share of TriState Oil Co. is declared for each share of Bigler stock outstanding. 1368 Property Dividends Declaration of Dividend: Dividends (or Retained Earnings) 3,000,000 Property Dividends Payable 2,700,000 Gain on Distribution of Property Dividends 300,000 Payment of Dividend: Property Dividends Payable 2,700,000 Investment in TriState Oil Co. Stock 2,700,000 1369 Stock Dividends ? Small: – Less than 20–25% of the outstanding shares. – Debit Retained Earnings for the market value of the shares. ? Large: – Greater than 20–25% of the shares outstanding. – Debit Retained Earnings for the par value of the shares. 1370 Small Dividend Example The stockholders’ equity section for the Fuji Company on July 1 is as follows: Common Stock, $1 par, 100,000 shares outstanding $ 100,000 PaidIn Capital in Excess of Par 1,100,000 Retained Earnings 750,000 The pany declares a 10% stock dividend. Before the stock dividend, the stock is selling for $22 per share. After the stock dividend, each original share sells for $20. (continues) 1371 Small Dividend Example Declaration of Dividend: Retained Earnings 200,000 Stock Dividends Distributable 10,000 PaidIn Capital in Excess of Par 190,000 Payment of Dividend: Stock Dividends Distributable 10,000 Common Stock, $1 par 10,000 1372 Large Dividend Example The stockholders’ equity section for the Fuji Company on July 1 is as follows: Common Stock, $1 par, 100,000 shares outstanding $ 100,000 PaidIn Capital in Excess of Par 1,100,000 Retained Earnings 750,000 The pany declares a 50% stock dividend. Before the stock dividend, the stock is selling for $22 per share. (continues) 1373 Large Dividend Example Declaration of Dividend: Retained Earnings 50,000 Stock Dividends Distributable 50,000 OR PaidIn Capital in Excess of Par 50,000 Stock Dividends Distributable 50,000 Payment of Dividend: Stock Dividends Distributable 50,000 Common Stock, $1 par 50,000 1374 Stock Dividends versus Stock Splits ? A corporation may effect a stock split by reducing the par or stated value of each share of capital stock and proportionately increasing the number of shares outstanding. ? A stock dividend results in an increase in the number of shares outstanding. The par or stated value remains unchanged. ? A stock split divides the existing Capital Stock balance into more parts, with a reduction in par or stated value of each share. 1375 Liquidating Dividends ? A liquidating dividend is a distribution representing a return to stockholders of a portion of contribution capital. ? Example: Stubbs Corporation declared and paid a cash dividend ($10 cash dividend) totaling $100,000 and a partial liquidating dividend of $50,000. 1376 Foreign Currency Translation Adjustment ? The foreign currency translation adjustment arises from the change in the equity of foreign subsidiaries (as measured in terms of . dollars) that occurs as a result of changes in foreign currency exchange rates. ? These changes are recorded as direct adjustments to equity. 1377 Unrealized Gains and Losses on AvailableforSale Securities ? Availableforsale securities are those that were not purchased with immediate intention to resell, but that a pany also doesn’t necessarily plan to hold forever. ? Reported on the balance sheet at their current market value. 1378 Unrealized Gains and Losses on Derivatives ? A derivative is a financial instrument, such as an option or a future, that derives its value from the movement of a price, an exchange rate, or an interest rate associated with some other item. ? Derivatives are used to manage risk associated with sales or purchases that will not occur until a future period. 1379 International Accounting: Equity Reserves ? In foreign countries, the payment of cash dividends is linked to the amount of distributable equity. ? Equity is divided among various equity reserve accounts, each with legal restrictions dictating whether it can be distributed to stockholders. 1380 International Accounting ? Capital stock may be: ? Authorized but unissued ? Subscribed for and held for issuance pending receipt of cash for the full amount of the subscription price ? Outstanding in the hands of stockholders ? Reacquired and held by the corporation for subsequent reissuance ? Canceled by appropriate corporate action