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 on October 1, 2014. Date Account Titles and Explanation Debit ($) Credit ($) 2014 October 1 Retained earnings 7,350,000,000 Dividends Payable 7,350,000,000 (To record the declaration of dividends) Table (1) Working Note: Compute the amount of dividends payable. Dividend payable = ( Number of common shares outstanding × Dividend declared per share ) = 3 , 000 , 000 , 000 × $ 2

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Author: Libby

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Chapter 11, Problem 11.21E

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Prepare journal entry for each appropriate date.

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Chapter 11, Problem 11.20E

Chapter 11, Problem 11.22E

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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...

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Prepare journal entry for each appropriate date.

Solution Summary: The author prepares journal entry for each appropriate date. Cash dividends are the amount of cash provided by a corporation out of its distributable profits to its shareholders.

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Chapter 11 Solutions