College Accounting question: How to prepare T accounts for this problem?
College Accounting question: How to prepare T accounts for this problem?
Martin Corporation has 250,000 authorized shares of $ 1 par value common stock, of which 200,000 are issued, including 20,000 shares of treasury stock. On October 15, the corporation's board of directors declared a cash dividend of $ .25 per share payable on November 15 to stockholders of record on November 1. Prepare entries in T accounts for each of the three dates.
The accounts are given. They are cash, dividends payable and dividents. I need help with the debit sides of these T accounts!
Thanks
Answers:
Chosen Answer
Sandy: The date of declaration is the date the Board of Directors formally authorizes for the payment of a cash dividend or issuance of shares of stock. This date establishes the liability of the company. On this date, the value of the dividend to be paid or distributed is deducted from retained earnings. The date of record does not require a formal accounting entry. It establishes who will receive the dividend. The date of payment or distribution is when the dividend is given to the stockholders of record. Oct 15 Dr Dividends $45,000 (180,000 shares x $0.25) Cr Dividends payable $45,000 Nov 1 No entry needed Nov 15 Dr Dividends payable $45,000 Cr Cash $45,000
2008-04-10 07:06:28
Sandy: The date of declaration is the date the Board of Directors formally authorizes for the payment of a cash dividend or issuance of shares of stock. This date establishes the liability of the company. On this date, the value of the dividend to be paid or distributed is deducted from retained earnings. The date of record does not require a formal accounting entry. It establishes who will receive the dividend. The date of payment or distribution is when the dividend is given to the stockholders of record. Oct 15 Dr Dividends $45,000 (180,000 shares x $0.25) Cr Dividends payable $45,000 Nov 1 No entry needed Nov 15 Dr Dividends payable $45,000 Cr Cash $45,000
2008-04-10 07:06:28