Question

Marigold Corp. has 7,800 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31.

Brief Exercise 8-16 Your answer is partially correct. Try again. Marigold Corp. has 7,800 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare a tabular summary to record the declaration and payment of the cash dividend. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets = Liabilities + Stockholders' Equity Paid-in-Capital Retained Earnings + _Revenue - Expense - Cash = Dividend Payable Dividend Nov. 1 7800 Dec. 31

Answer 1

Answer

--Declaration will increase Dividend payable (a liability) and Retained earnings gets decreased.

--When dividend is paid, liability is reduced and cash gets paid.

	Cash	Dividend Payable	Paid in Capital	Revenues	Expenses	Dividends
Nov-01	$0	$7,800	$0	$0	$0	($7,800)
Dec-31	($7,800)	($7,800)	$0	$0	$0	$0