Question

Jazz Co. pays a dividend of $2,300 Required: For the transaction above, complete the following: (a) Select the accounts that are affected (there will be at least two). (b) Are the selected accounts increased or decreased? (c) What is the dollar amount of change in the accounts? (d) If Retained Earnings is selected, choose the reason that it has changed.

Answer 1

Answer:

(a) Select the accounts that are affected (there will be at least two).  

The accounts are: Cash, Retained Earnings and Dividen Payable.

(b) Are the selected accounts increased or decreased?

Dividend Payable there is no change, Retained Earning Decrease and Cash Account Decrease, it's because the company has less Assets/Cash and Equity/Retained Earnings, The pays of dividend on Cash it's always a decrease in the company Equity.

(c) What is the dollar amount of change in the accounts?  

The declared to be paid on Dividends.

(d) If Retained Earnings is selected, choose the reason that it has changed.

It changes because you distributed your accumulated dividends with the stockholders, when the company makes profits it increase the retained earnings account, then with the pay of dividens it decrease.

Explanation:

When the pay dividends it's declared:

Retained Earnings $ 2.300

                                Dividend Payable $ 2.300

When the payment it's done:

Dividend Payable $ 2.300

                                Cash $ 2.300