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FiveStarLaw
FiveStarLaw, Lawyer, Accountant and Researcher
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Which of the following is a current liability? a. Preferred

Customer Question

Which of the following is a current liability?
a. Preferred dividends in arrears
b. A dividend payable in the form of additional shares
c. A cash dividend payable to preferred stockholders
d. All

My first instinct is to go with d, but I don't think dividends in arrears is.
Submitted: 2 years ago.
Category: Finance
Expert:  FiveStarLaw replied 2 years ago.

WebLaw :

*This chat is not intended as legal advice. It is general information that may or may not apply to your situation and should not be relied upon.*

WebLaw :

c

WebLaw :

A dividend payable in the form of additional shares involves capitalizing (charging) retained earnings equal to the market value of the stock distributed.

WebLaw :


I think this is what you wanted to know. Please use the REPLY button if you have any questions concerning my answer. Otherwise please click ACCEPT so that I am paid by the site for answering.

FiveStarLaw, Lawyer, Accountant and Researcher
Category: Finance
Satisfied Customers: 36412
Experience: 25 years of experience helping people like you.
FiveStarLaw and 5 other Finance Specialists are ready to help you
Expert:  FiveStarLaw replied 2 years ago.
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Customer: replied 2 years ago.
So, would dividends in arrears not be a current liability? I was thinking that it wasn't but then I thought that it does have to be paid, so it would be.
Expert:  FiveStarLaw replied 2 years ago.
No dividends in arrears is not a liability until it is declared
FiveStarLaw, Lawyer, Accountant and Researcher
Category: Finance
Satisfied Customers: 36412
Experience: 25 years of experience helping people like you.
FiveStarLaw and 5 other Finance Specialists are ready to help you
Customer: replied 2 years ago.
Okay, thank you. I had not thought of the declaration part. Makes complete sense now.

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