Fetzer Company declared a $0.35 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:

Question

Payton Cooper

Business

26 November, 00:03

Fetzer Company declared a $0.35 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:

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The journal entry to record the dividend declaration would be as follows:

Debit Credit

retained earnings $63,700

common dividend payable $63,700

Explanation:

According to the given data we have the following:

shares issued=190,000

treasury stock=8,000

cash dividend=$0.35

Therefore, to prepare the journal entry to record the dividend declaration we would have to calculate the retained earnings as follows:

retained earnings = (shares issued-treasury stock) * cash dividend per share

retained earnings = (190,000-8,000) * $0.35

retained earnings=$63,700

Hence, The journal entry to record the dividend declaration would be as follows:

Debit Credit

retained earnings $63,700

common dividend payable $63,700