Explanation Cash dividends : The amount of cash provided by a corporation out of its distributable profits to its shareholders as a return for the amount invested by them is referred as cash dividends. Declaration date : The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date. Date of record : The date on which the company verifies the ownership of shares of the shareholders entitled to receive the dividends declared, is referred as date of record. No entry is recorded on this date. Payment date : The date on which the company makes payments for the cash dividends declared to its shareholders is referred as payment date. Record the journal entry for the declaration of cash dividend of on February 5, 2018. Date Account Titles and Explanation Debit ($) Credit ($) 2018 February 5 Retained earnings 480,000 Dividends Payable 480,000 (To record declaration of dividends) Table (1) Working Note: Compute the amount of dividends payable. Dividend payable = { Number of shares outstanding × Dividend per share } = 1,600,000 shares × $0

Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)

12th Edition

ISBN: 9780134833156

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Chapter 10, Problem 10.9S

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To record: The declaration and payment of dividend.

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Chapter 10, Problem 10.8S

Chapter 10, Problem 10.10S

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Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)

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To record: The declaration and payment of dividend.

Solution Summary: The author explains the definition of cash dividends and how they are recorded. Retained earnings are a component of stockholders' equity account.

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To record: The declaration and payment of dividend.

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Chapter 10 Solutions