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Hitman42 [59]
3 years ago
12

The Groom company has 50,000 shares of $10 par value common stock outstanding when it declares a dividend of $1 per share. What

would be the journal entry for the declaration of the cash dividends? Select one:
a. Debit: Dividends Payable - Common Stock 50,000 Credit: Cash 50,000
b. Debit: Cash Dividends 50,000 Credit: Dividends Payable - Common Stock 50,000
c. Debit: Cash 50,000 Credit: Cash Dividends 50,000
d. Debit: Cash Dividends 50,000 Credit: Cash 50,000
Business
1 answer:
laiz [17]3 years ago
3 0

Answer:

B) Debit: Cash Dividends 50,000 Credit: Dividends Payable - Common Stock 50,000

Explanation:

At the time of declaration of dividends the proper journal entry should be:

  • Dr Retained Earnings 50,000
  • Cr Dividends Payable - Common Stock 50,000

You can use the Cash Dividends account, which is a temporary account, although it's not the best option. This account is used only when companies have not been making a profit before (retained earnings = 0), or for new companies.  

Since no payment is done, the cash account is not affected (eliminating options A, C and D).

Dividends Payable is a liability account and since it increases, it should be debited.

Cash Dividends is a temporary equity account that is debited once the company declares the dividend distribution.

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Andy has been working at Aerial Corp. for a long time. He feels he is hard working and that he deserves a pay hike. He seeks a m
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Answer:

C) ​The chronological context

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In this scenario because Andy had worked for a long time and he feels he is hard working, he feels he deserves a pay raise.

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QS 9-8 (Algo) Recording employer payroll taxes LO P3 Merger Co. has 10 employees, each of whom earns $1,700 per month and has be
oksian1 [2.3K]

Answer:

Dr Payroll Tax Expense: $2,321

Cr FICA- Social security taxes payable $1,054

Cr FICA- Medicare taxes payable $247

Cr SUTA-State unemployment taxes payable $918

Cr FUTA- Federal unemployment taxes payable $102

Explanation:

Preparation of the March 31 journal entry to record the March payroll taxes expense

March 31

Dr Payroll Tax Expense: $2,321

($1,054+$247+$918+$102)

Cr FICA- Social security taxes payable $1,054

[($1,700*10)*6.2%]

Cr FICA- Medicare taxes payable $247

[($1,700*10)*1.45%]

Cr SUTA-State unemployment taxes payable $918

[($1,700*10)*5.4%]

Cr FUTA- Federal unemployment taxes payable $102

[($1,700*10)*0.6%]

(To record payroll taxes expense)

5 0
3 years ago
Zapper has beginning equity of $293,000, net income of $69,000, dividends of $58,000 and stockholder investments of $24,000. Its
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Answer:

$328,000

Explanation:

As we all know that:

Ending Equity = Opening Equity + Share Issues + Net Income – Net Loss – Dividends Paid

Here,

Opening Equity is $293,000

Money raised through Shares Issuance was $24,000

Net Income would be $69,000

Dividends paid were $58,000

There were no losses as their is Profit for the year (Net Income).

By putting values, we have:

Ending Equity = $293,000  +  $24,000   +  $69,000   -  $58,000

= $328,000

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3 years ago
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