Frenchvanilla Company earned net income of $90,000 during the year ended Decembe

Question

Frenchvanilla Company earned net income of $90,000 during the year ended December 31, 2016. On December 15, Frenchvanilla declared the annual cash dividend on its 6% (part value, !105 000) and a $0.25 per share cash dividend on its common. stock (50,000 shares) Frenchvanilla then paid the dividends o. January 4, 2017

i Question Hep * year ended 0 31, 2016 On December 15, Fiandi ata a deda ed the a the anmual cash d stock pa ral S 105,000 ana sas per share ea d i d an i e m a sack so a00 shami F d inas nen pad the a denda ed ine ne of S80.000 du ng th ef 590,000 b di ia d n s 6% prate its 6% preferred stock lar fr h da Ca pany e en January 4.201 e 1.Joumalize for Fratchanila the enty dedaring the cash dividends an Dacember 15,2016 2 Jsumalize for Frenchvarilla the eity paying the cash dividends on January 4, 2017 Reg r nem 1 Junalet for hend van!" e " enty de 1 ng thn cash h dends on Decem er t5, 2016. R ard debi f st the credts. Sel t te planation on the latte of te mal o try latie o Dec. 15 Requirement 2 Joumalioe for Fratchwanlla the ertry paying the cash dividends on January 4, 2017. (Record dabts frst han credts Select the plaration on the wst Ine of the journal entry trable) Accoures and Explanation Credh

Explanation / Answer

Amount of dividend Preferred stock= 105000*6% 6300 Common stock= 50000*0.25 12500 Total 18800 Date Account Debit Credit Dec 15.2016 Retained earnings 18800 Dividend payable on common stock 12500 Dividend payable on preferred stock 6300 [Cash dividend declared] Jan.4 2017 Dividend payable on common stock 12500 Dividend payable on preferred stock 6300 Bank 18800 [Dividend distributed]

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