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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Cash dividends
The date of declaration, date of record, and date of payment in connection will a cash dividend of $1,200,000 on a corporation's common stock are June 1, July 15, and August 14, respectively. Illustrate the effects on the accounts and financial statements for each date.

To determine

Concept Introduction:

Cash dividend:

The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two journal entries made, one at the time of declaration of dividend and another at the time of payment.

To Indicate:

The effect of the transaction on the accounts and financial statements

Explanation

The effect of the transaction on the accounts and financial statements is explained as follows:

    ...
    Date Account Account TypeFinancial Statement Amount Increase or Decrease
    June. 1Retained earningsEquity Balance sheet $ 1,200,000 Decrease
    Cash Dividends PayableLiability Balance sheet

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