1. What are two principal components of stockholders' equity?
2. What effect does the stock Dividend have on total stockholders' equity, if a company declares to distribute the common stock dividend? Why would a company pay stock dividends rather than cash dividends?
3. What impact does the stock split 2-for-1 have on total stockholders' equity? Why would a company pay stock dividends rather than cash dividends?
4. Where would you report the cash dividend payable, Common Stock Dividend Distributable, and Stock split?
5. Where is the ending balance of total stockholder's equity reported?
6. What is the prior period adjustment? How is it reported in financial statement?
7. Where is the ending balance of Retained Earnings shown in the financial statements? Identify at least two financial statements.
8. Three dates are important in connection with cash dividends. Identify these dates, and explain their significance to the corporation and its stockholders.