Question

X Sex Sex llones X Recruitment Step Carid FC Club OLMA loads/Accounting20Principles, 2013th%20Edtion%20by%20Jerry201.%20Weygandt.pdf Funimation Account tiptrans Cookie Panel for Tokyo Otaku Mode fv tomp 1194110 QOOB w How The Profitable P Supreme registration Speedtest E14.1 (LO 1) Financial Statement On January 1, Guillen Corporation had 95.000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred. Apr. 1 Issued 25.000 additional shares of common stock for $17 per share. June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30. July 10 Paid the $1 cash dividend. Dec. 1 Issued 2,000 additional shares of common stock for $19 per share. 15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of record on December 31. Instructions a. Prepare the entries to record these transactions. b. How are dividends and dividends payable reported in the financial statements prepared at December 31?

Answer 1

a. Journal entries

Date	Account	Debit	Credit
Apr-01	Cash	$4,25,000
	Common Stock (25,000 * $17)		$4,25,000
Jun-15	Dividend [(95,000 + 25,000) * $1]	$1,20,000
	Dividend Payable		$1,20,000
Jul-10	Dividend Payable	$1,20,000
	Cash		$1,20,000
Dec-01	Cash	$38,000
	Common Stock (2,000 * $19)		$38,000
Dec-15	Dividend [(95,000 + 25,000 + 2,000) * $1.20]	$1,46,400
	Dividend Payable		$1,46,400

b. Dividend payable will be shown in the current liabilities in the balance sheet. Dividends will be reflected in retained earnings, as a result the balance in retained earnings will reduce.