Recording Dividend Declaration Following are four separate dividend scenarios. a. On April 1, 2020, Meriter Corporation declared a cash dividend of $5.00 per share on its 44,800 outstanding shares of common stock ($1 par). The dividend is payable on April 21, 2020, to stockholders of record on April 14, 2020. b. Axe Co. has issued and outstanding 1,400 shares of $100 par, cumulative, 5% preferred stock and 28,000 shares of $5 par common stock. Dividends are in arrears for the past year (not including the current year). On December 15, 2020, the board of directors of Axe Co. declared dividends of $35,000 to be paid to shareholders at the end of its fiscal year. c. Siri Corp. holds 1,400 shares of Mobile Co, common stock, purchased at the beginning of the year for $30 a share (carrying value on February 1, 2020). On February 1, 2020, Siri Corp. declared a property dividend of 630 shares of Mobile Co. common stock when the shares were selling at $28 per share. d. Treck Corporation declared a common stock dividend of $63,000 on April 1, 2020. Treck Corporation announced to shareholders that 70% of the dividend amount was a return of capital. Required Record the entry for the declaration of dividends for each of the four separate scenarios. Date Account Name Dr. Cr. a. April 1, 2020 Retained Earnings 224,000 0✓ Dividends Payable-Common Stock 224,000✔ 05 b. Dec. 15. 2020 Retained Earnings 35,000 14,000 Dividends Payable-Preferred Stock Dividends Payable-Common Stock 21,000✔ C Feb. 1. 2020 Unrealized Gain or Loss-Income OV Investment in Stock 2,800 x To record fair value adjustment. Feb 1, 2020 Retained Earnings DV Property Dividends Payable To record dividend declaration April 1, 2020 Retained Earnings Paid-in Capital in Excess of Par-Common Stock Dividends Payable d. : ✓ 04 05 0✓ 2.800 x 0✔ 17,640 0✔ 18,900✔ 44,100✔ 56 17,640 0✔ 0V 63,000
Recording Dividend Declaration Following are four separate dividend scenarios. a. On April 1, 2020, Meriter Corporation declared a cash dividend of $5.00 per share on its 44,800 outstanding shares of common stock ($1 par). The dividend is payable on April 21, 2020, to stockholders of record on April 14, 2020. b. Axe Co. has issued and outstanding 1,400 shares of $100 par, cumulative, 5% preferred stock and 28,000 shares of $5 par common stock. Dividends are in arrears for the past year (not including the current year). On December 15, 2020, the board of directors of Axe Co. declared dividends of $35,000 to be paid to shareholders at the end of its fiscal year. c. Siri Corp. holds 1,400 shares of Mobile Co, common stock, purchased at the beginning of the year for $30 a share (carrying value on February 1, 2020). On February 1, 2020, Siri Corp. declared a property dividend of 630 shares of Mobile Co. common stock when the shares were selling at $28 per share. d. Treck Corporation declared a common stock dividend of $63,000 on April 1, 2020. Treck Corporation announced to shareholders that 70% of the dividend amount was a return of capital. Required Record the entry for the declaration of dividends for each of the four separate scenarios. Date Account Name Dr. Cr. a. April 1, 2020 Retained Earnings 224,000 0✓ Dividends Payable-Common Stock 224,000✔ 05 b. Dec. 15. 2020 Retained Earnings 35,000 14,000 Dividends Payable-Preferred Stock Dividends Payable-Common Stock 21,000✔ C Feb. 1. 2020 Unrealized Gain or Loss-Income OV Investment in Stock 2,800 x To record fair value adjustment. Feb 1, 2020 Retained Earnings DV Property Dividends Payable To record dividend declaration April 1, 2020 Retained Earnings Paid-in Capital in Excess of Par-Common Stock Dividends Payable d. : ✓ 04 05 0✓ 2.800 x 0✔ 17,640 0✔ 18,900✔ 44,100✔ 56 17,640 0✔ 0V 63,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Recording Dividend Declaration
Following are four separate dividend scenarios.
a. On April 1, 2020, Meriter Corporation declared a cash dividend of $5.00 per share on its 44,800 outstanding shares of common stock
($1 par). The dividend is payable on April 21, 2020, to stockholders of record on April 14, 2020.
b. Axe Co. has issued and outstanding 1,400 shares of $100 par, cumulative, 5% preferred stock and 28,000 shares of $5 par common
stock. Dividends are in arrears for the past year (not including the current year). On December 15, 2020, the board of directors of Axe
Co. declared dividends of $35,000 to be paid to shareholders at the end of its fiscal year.
c. Siri Corp. holds 1,400 shares of Mobile Co. common stock, purchased at the beginning of the year for $30 a share (carrying value on
February 1, 2020). On February 1, 2020, Siri Corp. declared a property dividend of 630 shares of Mobile Co. common stock when the
shares were selling at $28 per share.
d. Treck Corporation declared a common stock dividend of $63,000 on April 1, 2020. Treck Corporation announced to shareholders
that 70% of the dividend amount was a return of capital.
Required
Record the entry for the declaration of dividends for each of the four separate scenarios.
Date
Account Name
Dr.
Cr.
a
April 1, 2020
✔
224,000
DV
Retained Earnings
Dividends Payable-Common Stock
Dec. 15. 2020 Retained Earnings
224,000✔
b.
35,000
OV
Dividends Payable-Preferred Stock
Dividends Payable-Common Stock
Unrealized Gain or Loss-Income
14,000 ✓
21,000✔
C
Feb. 1, 2020
0V
Investment in Stock
2,800 x
To record fair value adjustment.
Retained Earnings
Feb 1, 2020
DV
Property Dividends Payable
To record dividend declaration
April 1, 2020 Retained Earnings
Paid-in Capital in Excess of Par-Common Stock
Dividends Payable
d.
#
•
<<<.
0✓
05
0✓
2.800 x
24
17,640
889
18,900✔
44,100✔
GM
17,640
0✓
0
63,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education