6 Dividend Transactions (5 points) The RST Company Board of Directors authorized

Question

6 Dividend Transactions (5 points) The RST Company Board of Directors authorized 10,000,000 shares of 2 000 sar stock and 10,000 shares of $100 par 11% common issued and 750,000 shares 0 preferred stock issued and outstanding preferred stock There are 800,000 shares c outstanding. There are 10,000 shares of the diud.r Year 1 the RST Company declared dividends of s.50 per common share, pla dividends on preferred stock payable on Sept 1 to all shareholders of record on Ag Give the entries on the date of declaration, - date of record and e date of payment. 1-Aug 15-Aug 1-Sep Divide

Explanation / Answer

preferred stock $100 *11% 11 total dividend to preferred shareholders =11*10,000 110000 dividend to common shareholders 750,000*.50 375000 journal Entries Date Accounting titles & Expalanations Debit Credit 1-Aug Retained earnings 485,000 Dividends payable - PS 110,000 Dividends payable - CS 375,000 15-Aug no entry 1-Sep Dividends payable - PS 110,000 Dividends payable - CS 375,000 Cash 485,000

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