The directors of Lenox Corporation are considering issuing a stock dividend. Required: a. What is a stock
Question:
Required:
a. What is a stock dividend? How is a stock dividend distinguished from a stock split from a legal standpoint? From an accounting standpoint?
b. For what reasons does a corporation usually declare a stock dividend? A stock split?
c. Discuss the amount, if any, of retained earnings to be capitalized in connection with a stock dividend.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Step by Step Answer:
a A stock dividend is the issuance by a corporation of its own stock to its stockholders on a pro rated basis without receiving payment thereof The stock dividend results in an increase in the amount ...View the full answer
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Related Book For 
Financial Accounting Theory and Analysis Text and Cases
ISBN: 978-1118582794
11th edition
Authors: Richard G. Schroeder, Myrtle W. Clark, Jack Cathey
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