Ask Question
BusinessBusiness
28 May, 13:14

On May 20, the board of directors for Auction declared a cash dividend of 50 cents per share payable to stockholders of record on June 14. The dividends are paid on July 14. The company has 510,000 shares of stock outstanding. Closing entries are recorded on July 31. Prepare any necessary journal entries for each date.

+2
Answers (1)
  1. 28 May, 13:21
    0
    May 20

    No Entry

    June 14

    Dr. Dividends $255,000

    Cr. Dividend Payable $255,000

    July 14

    Dr. Dividend Payable $255,000

    Cr. Cash $255,000

    July 31

    Dr. Retained Earnings $255,000

    Cr. Dividend $255,000

    Explanation:

    Dividend = $0.5 x 510,000 = $255,000

    May 20

    Dividend is declared, No entry is required

    June 14

    Dividend to be recorded on this date. As dividend is not paid yet so it will be recorded as payable and on the other hand dividend account is debited to make a contra capital account of dividend.

    July 14

    Dividend is paid as cash is paid so, it will be credited and the liability is reduced so, it will be debited.

    July 31

    At the end of the period we have to adjust the Dividend Contra capital account in retained earning to make the dividend account zero.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On May 20, the board of directors for Auction declared a cash dividend of 50 cents per share payable to stockholders of record on June 14. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Trimble Graphic Design receives $1,800 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?
Answers (1)
What are Mormons? (I just want to know what people think)
Answers (1)
Kingston Development Corp. purchased a piece of property for $2.79 million. The firm paid a down payment of 15 percent in cash and financed the balance. The loan terms require monthly payments for 15 years at an annual percentage rate of 7.
Answers (1)
Those who watch sporting events regularly are more likely to participate in sports themselves. True O False
Answers (2)
Todd and Jim quickly learned that running a sailing business required a lot more than just taking folks for boat rides in exchange for a few dollars.
Answers (1)
New Questions in Business
Macrosoft Company reports net income of $65,000. The accounting records reveal depreciation expense of $80,000 as well as increases in prepaid rent, accounts payable, and income tax payable of $60,000, $12,000, and $18,000, respectively.
No Answers
Hornberger, Inc. recently paid a dividend of $2.00 per share. The next dividend is expected to be $2.05 per share. Hornberger has a return on equity of 11.00%. What percentage of its earnings does Hornberger plow back into the firm?
Answers (1)
A tip of $10 is best for which kind of service? A. a mover who delivers furniture to your new home B. a valet who parks your car at a restaurant C. a waiter at a fast-food restaurant
Answers (2)
Sunland Company manufactures and sells high-priced motorcycles. The Engine Division produces and sells engines to other motorcycle companies and internally to the Production Division.
Answers (1)
Adamson Company manufactures four lines of garden tools. As a result of an activity analysis, the accounting department has identified eight activity cost pools.
Answers (1)
Home » Business » On May 20, the board of directors for Auction declared a cash dividend of 50 cents per share payable to stockholders of record on June 14. The dividends are paid on July 14. The company has 510,000 shares of stock outstanding.
Sign Up Forgot Password?