Recording Liquidating Dividends On November 1 of Year 2, Toni Corp. declared a cash dividend of $3 per share on its 16,000 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 $32,000. a. Provide the entry for declaration of the dividend on November 1 of Year 2. Date Nov. 1, Year 2 Cash Account Name Retained Earnings To record declaration of dividend. b. Provide the entry for distribution of the dividend on January 5 of Year 3. Date Jan. 5, Year 3 Cash Account Name Retained Earnings To record distribution of dividend. c. Are there any potential issues in recording the cash dividend? Yes Dr. 32,000 0 0 Dr. 32,000 0 Cr. Cr. 0x 0x 32,000 * 0x 32,000 *
Recording Liquidating Dividends On November 1 of Year 2, Toni Corp. declared a cash dividend of $3 per share on its 16,000 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 $32,000. a. Provide the entry for declaration of the dividend on November 1 of Year 2. Date Nov. 1, Year 2 Cash Account Name Retained Earnings To record declaration of dividend. b. Provide the entry for distribution of the dividend on January 5 of Year 3. Date Jan. 5, Year 3 Cash Account Name Retained Earnings To record distribution of dividend. c. Are there any potential issues in recording the cash dividend? Yes Dr. 32,000 0 0 Dr. 32,000 0 Cr. Cr. 0x 0x 32,000 * 0x 32,000 *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ll.168.
Transcribed Image Text:Recording Liquidating Dividends
On November 1 of Year 2, Toni Corp. declared a cash dividend of $3 per share on its 16,000 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 $32,000.
a. Provide the entry for declaration of the dividend on November 1 of Year 2.
Date
Nov. 1, Year 2 Cash
Account Name
Retained Earnings
To record declaration of dividend.
b. Provide the entry for distribution of the dividend on January 5 of Year 3.
Date
Jan. 5, Year 3 Cash
Account Name
Retained Earnings
To record distribution of dividend.
c. Are there any potential issues in recording the cash dividend?
Yes
Dr.
32,000
0
0
Dr.
32,000
0
Cr.
Cr.
0x
0x
32,000 *
0x
32,000 *
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