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    Dividends and investment accounting method

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    Would you rather receive a cash or stock dividend? Why?

    What are the criteria for using the cost, equity, or consolidated method of accounting?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:24 pm ad1c9bdddf

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    a. Cash or Stock Dividend - The decision would be based on
    1. Tax Implications - Cash dividend would be current income and would be taxed on receipt, while stock dividend would be taxed on sale. Also capital gains on sale may be taxed at a lower rate than curent income in the form of dividend.
    2. Future Dividends - In stock dividend, the number of shares increases with the ...

    Solution Summary

    The solution explains difference between cash and stock dividend and the criteria to be used for accounting for investment