--%>

Capitalize earnings

To transfer amounts from retained earnings to contributed capital through stock dividends. The effect is to decrease retained earning and increase the stock account. Stock dividends also permanently retain the earnings in the corporation by moving it out of the retained earnings account-which is used for dividend payments-and into the contributed capital section of the balance sheet. To reduce the contributed capital, the corporation would declare liquidating dividends 

 

   Related Questions in Financial Accounting

  • Q : Canadian Outdooring Explain Canadian

    Explain Canadian Outdooring in brief ?

  • Q : Relationship-To Look for in each other

    What is Relationship and what are the traits that make any relationship happy and committed forever ?

  • Q : Prepare the journal entry to record the

    On December 31, 20x1, the Kat Co. purchase a group of four assets for a total cost of $1,000,000. An independent appraiser assesses the fair value of each asset asfollows: Asset Fair Value Land $350,000 Building 600,000 Equipment 200,000 Fixtures 150,000 Prepare the journal entry t

  • Q : Legal Reasoning and Writing This

      This exercise does not require you to do any research, and does not require you to cite to any references or external materials.  Do not include any constitutional arguments. Like many legal and policy questions

  • Q : Define Asset Purchase Asset Purchase :

    Asset Purchase: Agreement between seller and buyer to obtain an organization's assets. In an asset purchase, only particular assets transfer ownership from seller to the buyer. Assets should be re-titled to the latest owner who has the capability to d

  • Q : Currency trading at discount or at

    What is currency trading at discount or at premium in forward market?

  • Q : International bonds Explain why most of

    Explain why most of the international bonds have high Moody’s or Standard & Poor’s credit ratings?

  • Q : Why depreciation is not charged on land

    Explain why depreciation is not charged on land?

  • Q : What is Purchase What is Purchase .

    What is Purchase. Briefly state the definition of it?

  • Q : Average Profit Method in goodwill

    Average Profit Method: (Goodwill method): The profit earned by an organization throughout previous accounting periods on an average basis is termed as average profit. Goodwill is computed on the basis of average profit due to prospect expectations of