--%>

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 : REDUMPTION OF DEBENTURS WHAT IS

    WHAT IS REDUMPTION? AND WHAT ARE THE CONDITIONS?

  • Q : Report on Business memo analyzing

    Write a Report on Business memo analyzing monthly sales of a company. Try to explain it with graphs.

  • Q : Separately-priced-items strategy

    Problem 1.  The manager of Joe's Menswear has noticed that over the past two holiday seasons their usual sales strategy of marking down prices has not been yielding the boost in revenues that it once did.  JM sell men's suits, dress shirts,

  • Q : What do you mean by the term Equity

    What do you mean by the term Equity. Briefly explain it.

  • Q : Effect of shipping costs Assume that

    Assume that pound is being pegged to the gold at 6 pounds per ounce; on the other hand the franc is being pegged to the gold at 12 francs per ounce. Which, of course, states that equilibrium exchange rate must be the two francs per pound? If existing market exchange r

  • Q : What is Arbitrage Describe the term

    Describe the term Arbitrage.

  • Q : Balance of payments deficit or surplus

    Describe how country may run an overall balance of payments deficit or surplus.

  • Q : Pre-requisites to apply Budgetary

    Write down the pre-requisites to apply Budgetary Control?

  • Q : Balance sheet A listing of the

        A listing of the liabilities, assets, and equity of an entity at a point in time, the end of a month, or quarter, or year. It is one of the four financial statements required in a full financial report. The balance sheet gives the reader what the entity owns (assets)

  • Q : Quick establishment of the interest

    If cost advantage of the interest rate swaps might likely be arbitraged away within the competitive markets, what other explanations exists in order to describe quick establishment of interest rate swap market?