Cornerstone Exercise 10-32 Cash Dividends King Tut Corporation has issued 25,000

Question

Cornerstone Exercise 10-32 Cash Dividends King Tut Corporation has issued 25,000 shares of common stock, all of the same class; 18,000 shares are outstanding and 7,000 shares are held as treasury stock. On December 1, 2011, King Tut's board of directors declares a cash dividend of $0.75 per share payable on December 15, 2011, to stockholders of record on December 10, 2011. Required: Prepare the appropriate journal entries for the date of declaration, date of record, and date of payment. Cornerstone Exercise 10-33 Declaration of Cash Dividend Wilson Corporation declared a cash dividend of $80,000 on December 31, 2011. Required: What is the appropriate journal entry to record this declaration?

Explanation / Answer

King Tut Corporation Journal Entry Date Account Title Dr $ Cr $ Dec 1.2011. Retained Earning            13,500 Dividend Payable            13,500 ( $0.75 dividend declared for   18000 outstanding shares on declaration date) Dec 10. 2011. No entry required on recording date if the no of outstanding shares remain the same. Dec 15. 2011. Dividend Payable            13,500 Cash            13,500 ( Cash payout of dividend ) Wilson Corporation Date Account Title Dr $ Cr $ Dec 31.2011.. Retained Earning            80,000 Dividend Payable            80,000 ( $80,000 cash dividend declared)

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