Emily Corp

question 60

Short Answer

Emily Corp. owned shares in Carr Ltd. On December 1, 2020, Emily declared and distributed a property dividend of Carr shares when their fair value exceeded the carrying amount. As a consequence of the dividend declaration and distribution, the accounting effects would be Property Dividends

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Definitions:

Firm's Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition.

Generally Accepted Accounting Principles

A collection of commonly followed accounting rules and standards for financial reporting.

CRA

CRA can refer to a Credit Rating Agency, which is an organization that assigns credit ratings to issuers of certain types of debt securities, as well as the debt instruments themselves.

Economic Life

The expected period of time during which an asset is useful to the average owner, or until an asset is projected to generate economic benefits.