Question Completion:
Record the dividend declarations.
Answer:
Separate Dividend Scenarios
a. Meriter Corporation
April 1, 2020
Debit Cash Dividend $64,000
Credit Dividends Payable $64,000
To record the declaration of a cash dividend of $5.00 per share on its 12,800 outstanding shares of common stock, payable on April 21, 2020, to stockholders of record on April 14, 2020.
b. Axe Co.
December 15, 2020
Debit Cash Dividend:
Cumulative Preferred Stock $4,000
Common Stock $6,000
Credit Dividends Payable $10,000
To record the declaration of dividend to cumulative preferred and common stockholders.
c. Siri Corp.
February 1, 2020
Debit Property Dividend $5,400
Credit Mobile Co. Investment $5,400
To record the declaration of property dividend of 180 shares of Mobile Co. common stock.
d. Treck Corporation
April 1, 2020
Debit Common stock dividend $5,400
Debit Common stock $12,600
Credit Retained Earnings $18,000
To record the declaration of stock dividend and 70% in return of capital.
Explanation:
1. Data and Analysis:
a. Meriter Corporation
April 1, 2020 Cash Dividend $64,000 Dividends Payable $64,000
a cash dividend of $5.00 per share on its 12,800 outstanding shares of common stock, payable on April 21, 2020, to stockholders of record on April 14, 2020.
b. Axe Co.
December 15, 2020
Cash Dividend $10,000 Dividends Payable $10,000
Preferred stockholders $4,000 Common stockholders $6,000
Preferred stock = $40,000 (400 shares * $100)
Cumulative preferred dividend = $2,000 (5% of $40,000)
2019 Cumulative preferred dividend = $2,000
Total preferred dividend = $4,000
Common stock dividend = $6,000 ($10,000 - $4,000)
c. Siri Corp.
February 1, 2020
Property Dividend $5,400 Mobile Co. Investment $5,400
d. Treck Corporation
April 1, 2020
Common stock dividend $5,400 Common stock $12,600 Retained Earnings $18,000
70% of the dividend amount was a return of capital.
