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Dividend journal entry

Asked Feb 8, 2007, 04:03 PM — 19 Answers
Can someone please help me with this journal entry:

The company declared and distributed cash dividend totaling $6,000 to its shareholders.

I think the journal entry is this, am I right?

Dividends declared 6,000
Cash 6,000

Or is it

Dividends Payable 6,000
Cash 6,000

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19 Answers
KongTheKonqueror's Avatar
KongTheKonqueror Posts: 76, Reputation: 60
Junior Member
  
#2

Feb 8, 2007, 06:25 PM
One the declared date it would be,
Dividends 6,000
Dividends Payable 6,000

When paid it would be,
Dividends Payable 6,000
Cash 6,000

Or if done on the same date it would only be,
Dividends 6,000
Cash 6,000
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CaptainForest's Avatar
CaptainForest Posts: 3,684, Reputation: 2085
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#3

Feb 8, 2007, 09:26 PM
I agree with Kong.
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sajalarora's Avatar
sajalarora Posts: 16, Reputation: 14
New Member
  
#4

Feb 9, 2007, 12:04 AM
The proper treatment regarding dividend journal entries are as below:

At the time of dividend declared,

profit &loss appropriation a/c ......dr 6,000
to proposed dividend a/c 6,000
As dividend are first appropriated from the profit of the company.

At the time of dividend paid to shareholders

proposed dividend a/c......dr 6,000
to dividend a/c 6,000


dividend a/c .....dr 6,000
to cash a/c 6,000
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Mansi09's Avatar
Mansi09 Posts: 1, Reputation: 1
New Member
  
#5

Apr 19, 2009, 11:50 AM
Can some on please help me with this journal entry
JaN.16- delared a cash dividend and payable feb.15 to stock holders of record on feb.5
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morgaine300's Avatar
morgaine300 Posts: 6,564, Reputation: 1474
Uber Member
  
#6

Apr 19, 2009, 05:41 PM
Quote:
Originally Posted by Mansi09 View Post
can some on please help me with this journal entry
JaN.16- delared a cash dividend and payable feb.15 to stock holders of record on feb.5
Kong pretty well already answered what these journal entries are, other than the dollar amount being different of course.
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AAMIRSAIFULLAH's Avatar
AAMIRSAIFULLAH Posts: 1, Reputation: 10
Junior Member
  
#7

Nov 17, 2009, 06:33 AM
First when divided is declared the entry will be
Debit dividend xxx
credit to dividend payable xxx
Debit retaind earnings xxx
credit dividend xxx
And when payment
Debit dividend payable xxx
credit cash xxx
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S.Mehdi's Avatar
S.Mehdi Posts: 1, Reputation: 10
New Member
  
#8

Dec 16, 2009, 08:36 AM
When declared,

Retained earnings 6000
Dividend payable 6000

When paid,

Dividend payable 6000
Cash 6000
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hongoliu's Avatar
hongoliu Posts: 1, Reputation: 10
New Member
  
#9

Mar 23, 2010, 10:26 PM
Correct answer:
When declared:

Dr Dividends declared xxx
Cr Dividends payable xxx

When paid, there should be 2 journals
Dr Dividends paid xxx
Cr Dividends Declared xxx

Dr Dividends payable xxx
Cr Cash xxx

And if you paid by Retained Earnings
Dr Retained earnings
Cr Share capital
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morgaine300's Avatar
morgaine300 Posts: 6,564, Reputation: 1474
Uber Member
  
#10

Mar 28, 2010, 01:52 AM
The post is old. We do not just give answers away to homework - we try to help people understand it. (i.e. Answers without explanations aren't worth a lot). Third, your "correct" answer is incorrect.
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