Compare the major advantages of cash dividends and stock dividends that investors should look for when attempting to choose between two (2) publicly traded companies. Discuss your preference for either cash dividends or stock dividends, and support your position with real-world examples of the advantages of your preference.
Brief Exercise 14-03
Bramble Corporation has 47,500 shares of $12 par value common stock outstanding. It declares a 15% stock dividend on December 1 when the market price per share is $19. The dividend shares are issued on December 31.
Prepare the entries for the declaration and issuance of the stock dividend. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Brief Exercise 14-05
For the year ending December 31, 2020, Lily Inc. reports net income $132,000 and cash dividends $81,000.
Determine the balance in retained earnings at December 31, assuming the balance in retained earnings on January 1, 2020, was $216,000.
Balance in retained earnings
$
Brief Exercise 14-07
The following information is available for Lily Corporation for the year ended December 31, 2020: cost of goods sold $206,000, sales revenue $464,000, other revenues and gains $51,000, and operating expenses $70,000.
Assuming a corporate tax rate of 30%, prepare an income statement for the company.
LILY CORPORATIONIncome Statement
$
$
Exercise 14-02 a-c (Part Level Submission)
Sunland Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 106,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $6,500; 2020, $14,400; and 2021, $29,000.
(a)
Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.
2019
2020
2021
Allocation to preferred stock
$
