in the amount of $160,000 in the current year. It also declared and paid dividen
ID: 2526956 • Letter: I
Question
in the amount of $160,000 in the current year. It also declared and paid dividends on common stock in the amount of $2.60 per share. During the current year, Sneer had 1 million common shares authorized; 360,000 shares had been issued; and 154,000 shares were in treasury stock. The opening balance in Retained Earnings was $860,000 and Net Income for the current year was $360,000. Required: 1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock. (If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field.)Explanation / Answer
1. Entry to record declaration of cash dividend of $160,000 to the preferred stockholders. Transaction Account Title Debit Credit a.1. Dividends 160000 Dividend payable 160000 2. Entry to record payment of cash dividend of $160,000 to the preferred stockholders. Transaction Account Title Debit Credit a.2. Dividend payable 160000 Cash 160000 3. Entry to record declaration of cash dividend of $2.60 per share on the 206,000 shares of common stockholders. Transaction Account Title Debit Credit a.3. Dividends 535600 Dividend payable 535600 3. Entry to record payment of cash dividend of $2.60 per share on the 206,000 shares of common stockholders. Transaction Account Title Debit Credit a.1. Dividend payable 535600 Cash 535600 2. SNEER CORPORATION Statement of Retined Earnings for the year ended December 31 Retained earnings, January 1 860000 Add: Net income for the year 360000 Less: Dividends paid during the year 695600 Retained earnings , December 31 524400 3. To recrd entry to close the dividend account to retained earnings. Transaction Account Title Debit Credit a.1. Retained Earnings 695600 Dividends 695600
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.