Liquidating dividend accounting

Posted by / 03-Jul-2017 07:10

Liquidating dividend accounting

Companies will pay liquidating dividends under the following circumstances: Distributions can only be made to shareholders after the money owed to creditors has been paid.

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

This mainly occurs during voluntary liquidations of solvent corporations.

Property and Liquidating Dividends are another two items which are also included on the “Retained Earning” Accounts.

This concept is different than regular dividends, which are paid from the company's profits or retained earnings.

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x .00, or

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].

Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that 0,000 / 800,000, or [[

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].

Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

]].50 per share were regular dividends, while

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].

Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].

Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].

Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity =

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].

Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of ,500,000 of which

Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].

Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Companies will issue IRS Form 1099-DIV, which clarifies the tax implications of the distribution.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, $20 par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [$20 par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

,000,000 is considered income and the rest a return of contributed capital. Common Stock Dividend Distributable = 300,000 [Credit].Common Stock, par = 300,000 Following the issuance the stockholder’s equity is as follows: Common Stock, [ par x 45,000] = $ 900,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = 1,500,000 Note that the large stock dividend is treated as a stock split, that is, a split-up effected in the form of a dividend.

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Liquidating dividends are typically paid when a company is going out of business or has sold a portion of the enterprise.

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  1. "We went out one night and this guy was looking at her for a little too long," Jonas told Wendy Williams last November. I'm not a jealous person and this was an experience that I was one or two drinks in. Around the same time, Jonas noted that Culpo was his biggest supporter.