A firm wishes to maintain an internal growth rate of 8 percent and a dividend payout ratio of 36 percent. The current profit mar
1 answer:
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Answer:
<em>Increase to Cash dividends</em>
Explanation:
The entry on declaration of dividend is Retained earnings debit and credit is given to dividend payable. The cash dividend will increase to shareholders as a result of this action. The dividend payable will increase. Cash is not affected when dividends is declared. Cash is affected only when dividend is paid on August 15, 2017. Cash dividend will not decrease since dividend is paid it will increase. There are total 2 entries passed one on July 15th for dividend declaration and on August 15th for dividend payment. The record date of July 31 is only for determining which shareholders are eligible for dividend and no entry is needed.
