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netineya [11]
3 years ago
10

The board of directors of capstone inc. declared a $0.60 per share cash dividend on its $1 par common stock. on the date of decl

aration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. what is the entry for the dividend declaration?
Business
1 answer:
Liula [17]3 years ago
3 0

The entry for the dividend declaration is as following:
Debit Cash Dividend $12,000
Credit Dividend Payable $12,000
To acquire the amount we must multiply the dividend per share which is 0.06 with a number of common shares issued which is 20,000. Capston, Inc have to entry this transaction as the dividend declares although the cash has not yet disbursed to comply with the accrual principle.
 
The treasury stock must be ignored because it is the portion of stocks which held by the company in its own treasury and the amount of authorized stock because it is not yet issued and the company doesn't have the obligation to pay that portion of stocks dividend<span>.</span>
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Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance
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I used an excel spreadsheet to answer questions 2 and 3

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In order to prepare a trial balance we must prepare an income statement first.

Service revenue $6,800

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  Theodore McMahon, Attorney

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<u>For the Month Ended April 30, 2018</u>

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Accounts receivable $1,000

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Furniture $1,300

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Total assets: $210,400

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Accounts payable $1,950

Notes payable $140,000

Common stock $70,000

Retained earnings ($1,550)

Total liabilities and equity: $210,400

Download pdf
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> pdf </span>
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> pdf </span>
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