Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 11 - Reporting and Analyzing Stockholders' Equity - Questions - Page 603: 21

Answer

(a) The purpose of retained earning restrictions is to make a portion of the balance currently unavailable for dividends.

Work Step by Step

(b) Restrictions on retained earnings may be due to any one of the following reasons: i) Legal ii) Contractual iii) Voluntary
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