Explanation Cash dividend: 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. Payment date: The date on which the company makes payments for the cash dividends declared to its shareholders is referred as payment date. Prepare the journal entry to record the declaration of cash dividend on common stock. Date Account Title and Explanation Debit ($) Credit ($) February 20 Retained earnings (-SE) 229,440,000 Dividends payable (+L) 229,440,000 ( To record the declaration of cash dividends ) Table (1) Dividend is paid from retained earnings. Retained earnings are decreasing when dividend is declared. Hence, debit retained earnings with $229,440,000. Dividends payable is a liability. There is an increase in the liability. Hence, credit the dividends payable with $229,440,000. Prepare the journal entry to record the payment of cash dividend on common stock...

9th Edition

ISBN: 9781259738692

Author: Libby

Publisher: MCG

See similar textbooks

Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

Videos

Question

Chapter 11, Problem 11.20E

To determine

Prepare the journal entries to record the declaration and payment of dividends on common stock.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 11, Problem 11.19E

Chapter 11, Problem 11.21E

Students have asked these similar questions

Can you help me with accounting questions

correct answer please financial accounting

The company's price earnings ratio is equal to?

Chapter 11 Solutions

Financial Accounting

Ch. 11 - Prob. 1Q Ch. 11 - Prob. 2Q Ch. 11 - Explain each of the following terms: (a)...Ch. 11 - Differentiate between common stock and preferred...Ch. 11 - Explain the distinction between par value and...Ch. 11 - Define additional paid-in capital.Ch. 11 - Prob. 7Q Ch. 11 - Define treasury stock. Why do corporations acquire...Ch. 11 - How is treasury stock reported on the balance...Ch. 11 - What are the two basic requirements to support the...

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.

Similar questions

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:9781285595047
Author:Weil
Publisher:Cengage