Jazzy2010
Mar 23, 2010, 02:37 PM
Transaction: The board of directors declared a $2.70 per-share cash dividend payable on January 14 to stockholders of record on December 26th.
I have 10,000 shares authorized of common stock, no par, with a stated value of $30 per share.
My general ledger Common Stock account has a credit balance of $189,000 (6300 shares x $30). My general ledger Treasury Stock account has a balance of $44,610 (1,000 shares) and I recently repurchased another 700 shares totaling 1,700 shares. Based on this I would assume I have 4,600 shares outstanding.
I thought I would have to debit Retained Earnings since I am declaring $12,420 (4600 shares x $2.70) and I would need to credit Dividend Payable.
Should I not debit retained earnings?
Does my calculation for outstanding shares sound right to you?
Thanks again for your help.
I do have a Dividends Declared - Cash Account available in my project.
I have 10,000 shares authorized of common stock, no par, with a stated value of $30 per share.
My general ledger Common Stock account has a credit balance of $189,000 (6300 shares x $30). My general ledger Treasury Stock account has a balance of $44,610 (1,000 shares) and I recently repurchased another 700 shares totaling 1,700 shares. Based on this I would assume I have 4,600 shares outstanding.
I thought I would have to debit Retained Earnings since I am declaring $12,420 (4600 shares x $2.70) and I would need to credit Dividend Payable.
Should I not debit retained earnings?
Does my calculation for outstanding shares sound right to you?
Thanks again for your help.
I do have a Dividends Declared - Cash Account available in my project.