Ask Question
8 November, 01:46

On May 1, Year 3, the board of directors of Boxer Industries declared a property dividend of 4,500 shares of King Corporation common stock that Boxer had purchased as an investment (book value: $58,500). The market value of the 4,500 King shares was $121,500 (or $27 per share) on the date of declaration and $180,000 (or $40 per share) on the date of distribution. What amount will be debited to Retained earnings in the journal entry recorded on the declaration date?

+4
Answers (1)
  1. 8 November, 01:59
    0
    Answer: These could be explained as follows.

    Explanation: The amount to be debited in retained earnings on the declaration date will be $121,500.

    Journal entries will be as follows -

    1. Investment A/C Dr. $63,000

    To revaluation A/C $63,000

    (Being the value of investment increased)

    2. Retained earnings A/C Dr. $121,500

    To dividend payable A/C $121,500

    (Being dividend declared)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On May 1, Year 3, the board of directors of Boxer Industries declared a property dividend of 4,500 shares of King Corporation common stock ...” 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