Recording Liquidating Dividends On November 1 of Year 2, Toni Corp. declared a cash dividend of $3 per share on its 10,000 outstanding shares of common stock ($1 par, originally sold at $10 per share). The dividend is payable on January 5 of Year 3, to its stockholders of record on December 30 of Year 2. On its declaration date, the balance in the retained earnings account was $20,000. a. Provide the entry for declaration of the dividend on November 1 of Year 2. Date Nov. 1, Year 2 Account Name To record declaration of dividend. b. Provide the entry for distribution of the dividend on January 5 of Year 3. Date Account Name Jan. 5, Year 3 Dividends Payable Cash To record distribution of dividend. c. Are there any potential issues in recording the cash dividend? Yes ÷ Dr. Cr. 0 0 % 0 0 x 0 0x Dr. Cr. 30,000 0 30,000
Recording Liquidating Dividends On November 1 of Year 2, Toni Corp. declared a cash dividend of $3 per share on its 10,000 outstanding shares of common stock ($1 par, originally sold at $10 per share). The dividend is payable on January 5 of Year 3, to its stockholders of record on December 30 of Year 2. On its declaration date, the balance in the retained earnings account was $20,000. a. Provide the entry for declaration of the dividend on November 1 of Year 2. Date Nov. 1, Year 2 Account Name To record declaration of dividend. b. Provide the entry for distribution of the dividend on January 5 of Year 3. Date Account Name Jan. 5, Year 3 Dividends Payable Cash To record distribution of dividend. c. Are there any potential issues in recording the cash dividend? Yes ÷ Dr. Cr. 0 0 % 0 0 x 0 0x Dr. Cr. 30,000 0 30,000
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 9SPB: CASH DIVIDENDS, STOCK DIVIDEND, AND STOCK SPLIT During the year ended December 31, 20--, Baggio...
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