Answer:
The debit to the retained earning should be $750,000 for this transaction because that is the market value of the asset to be distributed as dividend.
Explanation:
Property dividend is a form of dividend payout that involves distribution of company`s assets to equity holders as a form of return. These assets can be inventory, marketable securities or investment in a subsidiary.
For this distribution to be formal, it must be approved by the board of directors of the company. After approved and declared, the accounting entries can now be passed.
The accounting entries needed are:
Debit: Retained Earnings with the amount of the asset distributed.
Credit: Dividend Payable with the amount of the asset distributed.
It is important to note that the market value of asset to be distributed should be considered i.e the market value of the asset must be recognized in the book. The difference in book value and market value of the investment will be recognized in respective asset ledger account prior transfer to retained earnings.So that the market value of the investment is recognized on the debit side of retained earnings
In the case of Fitzgerald, $750,000 will be debited to retained earnings since it is the market value of the asset to be distributed.
<span>Corporate Social Responsibility (CSR) can be described as an approach of business that contributes to continuous development of business by providing/delivering economic, environmental and social benefits to all the stakeholders of the company. CSR means that a corporation should take accountability of its actions on people, community and the environment in which it exists.</span>
Answer:
The income statement determines very important information for a business investment proposal such as EBITDA : Earnings Before Interest and Taxes plus Depreciation and Amortization.
This indicator is critical to know how much profit is drive just by the operation of the business. You can compare this indicator with accounts such as long term and short term loans in order to determine how much debt is healthy for the business to ask for investors or a bank.
Explanation:
Answer:
A right to force the business into bankruptcy if dividends are not paid.
Explanation:
These are the characteristics of Equity Financing:
-Maturity. Equity funding does not need to be repaid.
-Claim on income. At management´s discretion and if the company is profitable, shareholders may receive dividends after creditors have been paid.
-Claim on assets. Shareholders have claims only after the firm satisfies claims of lenders.
-Influence over management. As owner of the company, shareholders can vote on some aspects of corporate operations, although in practice only large shareholders have much influence. Private equity holders can have considerable influence.
