Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

تمرين 13

Recording Stock Dividends
Activision Blizzard, Inc., reported the following in the notes to its financial statements.

Required:
1. Describe the effects that this transaction would have had on the company's financial statements. Assume that 600 million shares were outstanding at the time of the transaction, trading at a stock price of $33.
TIP : Although the financial statements refer to a stock split, the transaction actually involved a 100% stock dividend. Large stock dividends, such as a 100% dividend, are recorded at par value.
2. Why might the board of directors have decided to declare a stock dividend rather than a stock split