Homework Answers
| SOLUTION : A, B & C | |||
| Journal Entries | |||
| Transaction | ACCT Title and explanation | Debit | Credit |
| A | Retained Earnings (5,000,000 Shares X $ 1.75) | $87,50,000 | |
| Dividend Payable - Common Shares | $87,50,000 | ||
| (Declare the cash dividend) | |||
| B | Retained Earnings (5,000,000 Shares X 40% = 2,000,000 Shars X $ 75) | $15,00,00,000 | |
| Common Stock dividend distributable (2,000,000 Shares X $ 2.50) | $50,00,000 | ||
| Paid in Capital in Excess of par - Common Stock(Balance ) | $14,50,00,000 | ||
| B | Common Stock dividend distributable | $50,00,000 | |
| Common Stock | $50,00,000 | ||
| C | Retained Earnings (5,000,000 Shares X 10% = 500,000 Shars X $ 75) | $3,75,00,000 | |
| Common Stock dividend distributable (500,000 Shares X $ 2.50) | $12,50,000 | ||
| Paid in Capital in Excess of par - Common Stock(Balance ) | $3,62,50,000 | ||
| C | Common Stock dividend distributable | $12,50,000 | |
| Common Stock | $12,50,000 | ||
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