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10 January, 23:46

West company declared a $0.50 per share cash dividend. the company has 190,000 shares issued, and 10,000 shares in treasury stock. the journal entry to record the dividend declaration is:

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  1. 10 January, 23:57
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    To record the dividend declaration

    Ordinary Share Capital $90000

    Dividend Payable $90000

    to record payment

    Dividend Payable $90000

    Cash $90000

    The amount is derived from the shares issued and outstanding so, the 190000 issued is deducted by 10000 treasury shares because treasury shares are reacquired by the company so it is not an outstanding share, then just multiply the answer with the dividend per share to arrive at $90000

    190000-10000shares * $.50 = $90000
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