Question

Handwrite in text plz not in pic since its hard to read from and plz dont copy answers that were answered before  least 2-3 paragraphs

1. What is treasury stock? Explain and discuss some of the reasons a corporation may purchase treasury stock.

2.What is a stock dividend? Describe and discuss reasons why a company would choose to give dividends in the form of stock rather than cash. In your response explain how issuance of a stock dividend affects the accounting records.

least 2-3 paragraphs

Answer 1

A Treasury Stock or reacquired Stock will be Stock which is repurchased by the giving organization, decreasing the measure of Outstanding Stock on the Open Market including Insiders' Holdings). Stock Repurchases are utilized as a Tax Efficient Method to place money into investors' hands, as opposed to paying Dividends, in locales that treat capital acquires well.

1.         Sometimes, organizations do it when they feel that their Stock is underestimated on the Open Market.

2.         Other times, organizations do it to diminish Dilution from motivating force pay plans for representatives.

3.         Another thought process in Stock repurchase is to ensure the organization against a Takeover danger.

4.         Buying Back Shares will improve Price/Earnings proportions because of the discounted number of offers (and Unchanged Earnings) and improve Earnings Per Share proportions because of less Shares Outstanding (and Unchanged Earnings)

5.         One other explanation behind an organization to repurchase its own Stock is to remunerate holders of Stock choices.

The United Kingdom likeness Treasury Stock as utilized in the United States is Treasury share. The Treasury Stocks in the UK allude to government bonds or gilts.

A Stock Dividend is a Dividend installment made as extra Shares as opposed to a money payout. Organizations may choose to disperse this sort of Dividend to Shareholders of record if the organization's accessibility of fluid money is hard to come by. These circulations are commonly recognized as portions paid per existing Share

The primary preferred position they have with paying the Dividend is sparing the organization's Cash Position

Another favorable position for the organizations giving these Dividends is that they may be taking a gander at expanding Liquidity of its Shares by giving more Shares. This will adequately decrease the estimation of Shares, and henceforth the cost.

Profit paying Stocks and organizations are viewed as the most dependable and sound speculation openings.

A Stock Dividend is the issuance by an organization of its Common Stock to Shareholders with no thought. A business commonly gives a Stock Dividend when it doesn't have adequate money to pay out a typical Dividend, thus turns to a "paper" circulation of extra offers to Shareholders. A Stock Dividend is never treated as an obligation of the backer, since the issuance doesn't decrease resources. Thus, this sort of Dividend can't practically be viewed as an appropriation of resources for Shareholders.

When there is a Stock Dividend, the related bookkeeping is to move from Retained Earnings to the capital Stock and extra Paid-In capital records a sum equivalent to the Fair Value of the extra Shares gave. This Fair Value depends on their Market Value after the Dividend is pronounced.                                       Debit               Credit

Retained earnings                   XXX  

     Common Stock                                         XXX

     Additional paid-in capital                        XXX