Answered: Cash Dividends Sanders Corporation has…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter12: Statement Of Stockholders’ Equity (stockeq)

Section: Chapter Questions

Problem 1R: Chen Corporation began 2012 with the following stockholders equity balances: The following selected...

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Question

Cash Dividends

Sanders Corporation has the following shares outstanding: 6,000 shares of $50 par value, twelve percent preferred stock and 40,000 shares of $1 par value common stock. The company has $328,000 of retained earnings. At year-end, the company declares its regular $6 per share cash dividend on the preferred stock and a $7.2 per share cash dividend on the common stock. Three weeks later, the company pays the dividends.

a. Prepare the journal entry for the declaration of the cash dividends.
b. Prepare the journal entry for the payment of the cash dividends.

General Journal
Ref.	Description	Debit	Credit
a.	Answer	Answer	Answer
	Answer	Answer	Answer
	Dividends Payable - Common Stock	Answer	Answer
	To record declaration of dividend on preferred stock andcommon stock.
b.	Answer	Answer	Answer
	Dividends Payable - Common Stock	Answer	Answer
	Answer	Answer	Answer
	To record payment of dividends on preferred and common stocks.