Recording Liquidating Dividends On November 1 of Year 2, Toni Corp. declared a cash dividend of $3 per share on its 10,000 outstanding shares of common stock ($1 par, originally sold at $10 per share). The dividend is payable on January 5 of Year 3, to its stockholders of record on December 30 of Year 2. On its declaration date, the balance in the retained earnings account was $20,000. a. Provide the entry for declaration of the dividend on November 1 of Year 2. Date Nov. 1, Year 2 Account Name To record declaration of dividend. b. Provide the entry for distribution of the dividend on January 5 of Year 3. Date Account Name Jan. 5, Year 3 Dividends Payable Cash To record distribution of dividend. c. Are there any potential issues in recording the cash dividend? Yes ÷ Dr. Cr. 0 0 % 0 0 x 0 0x Dr. Cr. 30,000 0 30,000
Recording Liquidating Dividends On November 1 of Year 2, Toni Corp. declared a cash dividend of $3 per share on its 10,000 outstanding shares of common stock ($1 par, originally sold at $10 per share). The dividend is payable on January 5 of Year 3, to its stockholders of record on December 30 of Year 2. On its declaration date, the balance in the retained earnings account was $20,000. a. Provide the entry for declaration of the dividend on November 1 of Year 2. Date Nov. 1, Year 2 Account Name To record declaration of dividend. b. Provide the entry for distribution of the dividend on January 5 of Year 3. Date Account Name Jan. 5, Year 3 Dividends Payable Cash To record distribution of dividend. c. Are there any potential issues in recording the cash dividend? Yes ÷ Dr. Cr. 0 0 % 0 0 x 0 0x Dr. Cr. 30,000 0 30,000
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 4SEB: STOCK DIVIDENDS Martinez Company currently has 200,000 shares of 1 par common stock outstanding. On...
Related questions
Question
100%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Accounting (Text Only)
Accounting
ISBN:
9781285743615
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning