For Journal Entry Worksheet above: 1. Record the declaration of a cash dividend

Question

For Journal Entry Worksheet above:

1. Record the declaration of a cash dividend of $120,000 to the preferred stockholders.

2. Record the payment of the cash dividend to the preferred stockholders.

3. Record the declaration of a cash dividend of $2.20 per share to the common stockholders payable on the shares outstanding.

4. Record the payment of the cash dividend to the common stockholders.

The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $120,000 in the current year. It also declared and paid dividends on common stock in the amount of $2.20 per share. During the current year, Sneer had 1 million common shares authorized; 320,000 shares had been issued, and 118,000 shares were in treasury stock. The opening balance in Retained Earnings was $820,000 and Net Income for the current year was $320,000 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 transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 4 Record the declaration of a cash dividend of $120,000 to the preferred stockholders Note: Enter debits before credits. ransaction General Journal Debit Credit Record entry Clear entry View general journal 2. Using the information given above, prepare a statement of retained earnings for the year ended December 31 SNEER CORPORATION Statement of Retained Earnings For the Year Ended December 31 Retained Earnings, January 1 Retained Earnings, December 31

Explanation / Answer

the following are the required journal entries:

1.Declaring a cash dividend of $120,000 to preferred stockholders.

2.payment of the cash dividend to preferred stock holders.

3.declaration of cash dividend to common stock holders.

4.payment of cash dividend

2. statement of retained earnings:

3.journal entry to close the dividend account:

1 Dividends a/c $120,000 ................To Preferred Dividends payable a/c $120,000

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