Answer:
$7,200
Explanation:
To solve this problem, we use the calculation of dividends formula.
This is represented as follows:
Dividends = (Number of shares issued - Treasury stock held) * dividend per share
According to the parameters in the question, number of shares issued = 23,000
Treasury stock held = 5,000
Dividend per share = $0.40
Substituting these values, we have:
Dividends = (23,000-5,000) * $0.4
Dividends = 18,000 * $0.4 = $7,200
The entry when the dividend is declared is $7,200
