
Sam L H. answered 10/09/15
Tutor
New to Wyzant
Knowledgeable Accounting and Finance Tutor
The month in which the company declares a dividend payment(January), the following journal entry will be made:
1/31 Dr. Retained Earnings 48,480 =( 80,800 outstanding issued stocks X 0.60)
Cr. Dividend payable account 48,480
2/15 Dr dividend payables 48,480
Cr. cash (actual payment of dividend declared) 48,480
4/30 declared 10% stock dividend to stock holders on 4/15 80,800 x .10= 8,080 x 15= 121,200
Dr. Retained earnings 121,200
Cr Common stock par $10 (8080x10) = 80,080
Cr Paid in capital 41,120
5/15 Issuance of the stock does not involve entries (no cash transaction)
12/31 declared cash dividend of 0.50 a share for stock holders of record dated 12/15
Dr. Retained earnings 44,440
Cr. Dividend payable 44,440
Liz K.
how do you get 44,440 for the $0.50 cash dividend on Dec. 1?12/11/19