On May 1, 2016, Love Corporation declared a $97,900 cash dividend to be paid on

Question

On May 1, 2016, Love Corporation declared a $97,900 cash dividend to be paid on May 31 to shareholders of record on May 15 Required a. Record the events occurring on May 1, May 15, and May 31 in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event. Balance Sheet Income Statement Cash Flow mmon +Earn Stock Retained Earnings AssetsLiabilities +C Date May 1 May 15 May 31 Revenue ExpenseNet Income

Explanation / Answer

Date Assets Liabilities Common stock Retained earnings Revenue Expense Net income Cash flows May-01 97900 -97900 NA May-15 NA May-31 -97900 -97900 -97900 FA b May-01 Cash dividends/Retained earnings 97900            Cash dividends payable 97900 May-15 No entry May-31 Cash dividends payable 97900            Cash 97900

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