The article focuses on asset valuation in dividend decisions. The law is greatly concerned with keeping intact the amount of capital contributed by stockholders so that most of the general corporation statutes prohibit the payment of dividends from that contribution. This limits the source of such corporate distributions to surplus, which is the excess of the assets over liabilities and capital. In order to determine whether or not a corporation has a surplus, it is necessary to value the assets so that a comparison may be made with the total of the liabilities and the capital stock. The paper reviews the Great Britain and the U.S. dividend decisions involving asset valuation with the object of learning what assets are recognized and how they are valued by the courts when they compute the amount of surplus available for dividend purposes. In the valuation of corporate assets, money due but not actually received may be considered if there is no reasonable question of payment. Among the receivables recognized in the dividend decisions are accounts, notes, overdrafts, loans, bonds and guaranties.

Reviews the book "The Secretary's Manual," by Larrae A. Haydon and Cyrus Garnsey.

The statutory laws governing corporate dividends are significant to accountants and teachers of accounting. The directors of a corporation have power, in their discretion, to determine what, if any, dividends shall be declared and paid to stockholders. This is the general statutory rule which applies in all states and territories of the United States and which also prevails in England. The variations from it are few and slight. The rule applies in New Jersey unless otherwise provided in the certificate of incorporation or in by-laws adopted by at least a majority of the stockholders. In England, a company in general meeting may declare dividends, but the amount must not exceed the amount recommended by the directors. The statutes of several jurisdictions give the stockholders power to exert a limited degree of pressure upon the directors in the matter of dividend declaration. In New Mexico and Puerto Rico in United States, unless otherwise provided in the certificate of incorporation, the directors must declare a dividend of the whole of the company's profits exceeding the reserve and pay it to the stockholders on demand.

Reviews the book "Principles of Auditing," by F.R.M. de Paula.

This article discusses the topic of dividends on non-cumulative preferred stock. The development of the corporation into a dominant form of business organization, has added new complications to capital structures such that the problem of preserving a proper balance between the holders of various classes of securities in their competition for income is becoming more and more difficult to solve. The preservation of this balance by the adjustment of relationships among the groups owning corporate shares is an extremely delicate and arduous task for the courts. So far as dividends are concerned, preferred stock may be classified as cumulative and non-cumulative. On the other hand, the holders of non-cumulative preferred stock are entitled to no dividends for any particular year if there are no earnings for that period. A problem arises when profits are sufficient to pay a dividend to this class of shareholders but the board of directors refuses to make a distribution for that year and invests the earnings in fixed improvements or retains them as working capital.

Reviews the book "Bookkeeping and Accounting for Rural Schools," by M.E. Studebaker.

The word dividend usually refers to a distribution of corporate profits to stockholders in the form of cash. However, corporations may find it convenient or necessary to distribute their earnings in the form of property among their shareholders, and, when stockholders are few and the corporate property is readily divisible without decreasing its value there may be little, if any, objection to this method of distribution. In order to meet this need of modern business, various forms of property distributions, in addition to cash, stock, and scrip dividends, have been recognized and approved by the courts. The general rule is that when a corporation has accumulated sufficient property other than cash to justify a division among its stockholders, the directors, at their discretion, may pay dividends in specific property, if there is no statute or charter to the contrary. A corporation may make a property dividend of its own stock which has been purchased with surplus assets. A dividend of a company's own bonds is legal if it does not impair the capital stock of the concern.

When the board of directors of a corporation declares dividends it generally makes them payable at a future date and when that date arrives the distribution to the stockholders usually is made according to the terms of the resolution. However, between the date of declaration and the time set for payment, the corporation may have reverses which leave it in such condition that conservative financial policy would decree that nothing be paid to the shareholders. It has been held that the declaration of cash dividend severs the amount from corporate funds and creates a debt on the part of the corporation in favor of its stockholders and this debt cannot be rescinded against the will of any stockholder so far as he is concerned. But if a board of directors should declare a cash dividend and make a public announcement of the fact, the courts have held that thereafter the board has no right to reconsider and rescind its action. Insolvency of the corporation occurring before payment made no difference in the obligation of the company to carry out its dividend declaration and gave the concern no right to rescind the unpaid dividend debt.

This article is an attempt to state the fundamental legal principles governing the rights of holders of original shares in a corporation to subscribe when that corporation issues new or unissued stock. The general rule is that when new shares are issued for money each `holder of the original stock is entitled to a prior right to subscribe in the proportion that his shares bear to the total issue before the increase If part of the authorized capital stock of a corporation remains unissued, in the absence of a statute to the contrary, each stock- holder has a right to purchase such proportion of it, when the issuance and sale thereof are directed, as his holdings bear to the stock then outstanding. It has been held that the right to issue the remaining stock is a corporate franchise, held by the corporation in trust for the corporators, and that this right must be used for the benefit of all the shareholders. The same rule applies to the corporation which has issued and sold but part of its authorized stock and later decides to issue the unissued shares.

Owing to the comparative youth of the accounting profession, court decisions affecting its members are few and scattering. However, the importance of these adjudications to the profession in inverse proportion to their number. An attempt is made in this article to state the significant parts of the American and English cases which have been decided during the past half century. Since accounting has attained the dignity of a profession, its members are subject to the same rules in their practice as are the members of other skilled professions. The damages claimed on account of the losses from the defalcations of the clerk and the insolvency of his surety are too remote to recovered, without showing the existence of special circumstances, known to defendants from which they ought to have known that much losses were likely to result from failure to disclose the true condition of affairs. Such losses are neither the natural nor the proximate consequences of the failure of defendants to make a proper audit.