Ask Experts Questions for FREE Help !
Ask
    veronikak's Avatar
    veronikak Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Oct 1, 2011, 04:32 PM
    Declaring a cash dividend
    Hello,

    Please help me to understand how to journal entry this accounting problem.

    March 5: Declared a $.40 per share cash dividend to be paid on April 6th to stockholders of record on March 20th.

    Contributed Capital for Common Stock was given as $2/par value, 6,000,000 shares authorized, 1,000,000 shares issued and outstanding.




    Thank you!
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Oct 1, 2011, 05:00 PM
    First you have to figure out how much the cash dividends will be. Take $0.40 per share cash dividend times the number of shares issued and outstanding on March 20.

    So $0.40 * 1,000,000 = total amount of cash dividends.

    Now your journal entry will be:
    Debit Retained Earnings for the amount calculated above
    Credit Dividends Payable for the amount calculated above
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

How to declare a cash dividend? [ 5 Answers ]

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?

Recording of cash dividend [ 1 Answers ]

Okay the question is declared a cash dividend of $3500 Dividend will not be paid until next month. Which journal do I post that in special journal or a general journal?

How to calculate Stock dividend shares and cash dividend amounts? [ 1 Answers ]

I owe 600 shares common stock , I currently received cash dividend of .42 per share a year. A 5% stock dividend, was declared, how many shares of coomon stock would I receive as a dividend?

View more questions Search