Question

Hemingway Corporation has 100,000 shares of common stock issued and outstanding. At the meeting of the board of directors on December 1, the board voted to declare a cash dividend of $5 per share to be paid on December 31, to shareholders of record as of December 16.Complete the necessary journal entry on the date of declaration by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Answer 1

Answer:

Explanation:

The adjusting entry is shown below:

Cash Dividend A/c Dr $500,000

        To Dividend payable               $500,000

(Being dividend is declared)

The dividend amount is computed below:

= Number of shares held × cash dividend per share

= 100,000 shares × $5

= $500,000

As dividend is declared so we debited the cash dividend account and credited the dividend payable as it is a current liability

Answer 2

                                                                            Debit               Credit

Cash 100,000 x 5                                           $ 100,000

Common Stock (100,000 x $ 5)                                             $ 500,000

Paid Up Capital Exceeds the Value Set (100,000 x $ 5)      $ 500,000

Further Explanation

Shares are securities or books which are a sign of ownership or equity participation in a company.

Stocks usually take the form of a piece of paper as proof. Shares can be obtained from the company concerned directly or from previous parties through the stock exchange (stock market).

Book Value of Shares

The book value of shares is the value of shares according to the company's books. The book value of the shares is obtained from the value of the remaining assets after deducting the company's liability if the shares are distributed. The book value shows the guarantee or how big the function of shares owned by investors. Some values ​​related to book values ​​include:

• Nominal value is the value determined by the company for its shares.
• Agio share is the difference in price from an investor's payment to the company minus the nominal price of the stock.
• Capital value is the total amount paid by shareholders to the company, in the form of nominal value + share capital.
• Retained earnings are profits not distributed to shareholders which are used for investment as a source of internal company funds.

Cash Flow for Shareholders:

If you buy shares, you can get cash in two ways, namely:

• The company pays dividends
• We sell shares (to other investors in the capital market or to issuers/companies that sell their shares to the public)
• Like bonds, stock prices are the present value of expected cash flows.

Learn More

Common Stock brainly.com/question/13513598

Values of Shares brainly.com/question/13024270

Detail

Class: College

Subject: Business

Keyword: Stock, Journal, Debt-Credit