[Jazzy2010]

The board of directors declared a $2.70 per-share cash dividened payable on January 14 to stockholders of record on December 26 (after purchase of stock). What information is needed to complete a journal entry? How do I journalize this?

[ROLCAM]

You need to know how many shares there are on the required date.

The Journal Entry:-

DEBIT Dividend Account
CREDIT Dividends Payable Account.

Being Dividend declared January 14th.

[morgaine300]

Is this one of those problems where they give you a bunch of beginning balances for stockholder's equity, and then give you a bunch of transactions with issuing stock, paying dividends, stock dividends, treasury stock, and the like? If so, be VERY careful about keeping track of all the balances of everything as you go. That is the only way you are going to know how many shares you have.

[Jazzy2010]

Yes I have beginning balances. 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.

[Jazzy2010]

[QUOTE=Jazzy2010;2284708]Yes I have beginning balances. 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.

[morgaine300]

Just as a note, it helps us a whole lot if you don't post the same thing more than once. I thought this looked awful familiar, because I saw it the other day where someone else answered in a different thread. But it just kind of gets confusing and actually takes more of our time when things get posted more than one place.

For future reference.