Reference no: EM132468676

Question 1: The board of directors is considering either a stock split of a stock dividend. They understand that total stockholders equity will remain the same under either action. However; they are not sure of the different effects of the two types of actions on other aspects of stockholder's equity. Explain the differences to the directors?

Question 2: Ling Corporation uses the equity method to account for its ownership of 35% of the common stock of Gorman Packing. During 2017, Gorman reported a net income of $80,000 and declares and pays cash dividends of $10,000. Ling's 35% ownership of Gorman's common stock increased in value by $10,000 over the course of the past year. What recognition should Ling Corporation give to these events?

Question 3: Why is it necessary to use comparative balance sheets, a current income statement, and certain transaction data in preparing a statement of cash flows?

Question 4: Stan Kaiser is confused about the source documents used in assigning materials and labor costs. Identify the documents and give the entry for each document ?