16-17 Help Seve&Exit; per share cash dividend. The company has 440,000 shares ou

Question

16-17 Help Seve&Exit; per share cash dividend. The company has 440,000 shares outhorized, 418,000 shares issued, and 17,600 shares in treacury stock. The journal entry to record the dividend declaration is Multiple Choice Debit Retained Earnings $180180, credit Common Dividends Payable $180380 O Debt Retained Earnings $18300. creait Common Dnwdends Payable Sis8 1oo Debit Common Dividends Poyable $180.180, credit Cash $180180 Debit Common Dividends Payable $188100, credit Cash $188100 Deot Resined Earnings $13e.ooo.creair Common Dwcends Paysce $198.00. o search

Explanation / Answer

Solution:

total outstanding shares = Share issued - share in treasury = 418000 - 17600 = 400400 shares

Dividend per share = $0.45

Total dividend declared = 400400 * $0.45 = $180,180

Therefore journal entry to record dividend declaration is "Debit retained earnings by $180,180 and credit common dividend payable by $180,180"

Hence first option is correct.

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