Question

The stockholders' equity section of Jay Company's balance sheet on 2009 December 31, shows 100,000 shares of authorized and issued USD 20 stated value common stock, of which 9,000 shares are held in the treasury. On this date, the board of directors declared a cash dividend of USD 2 per share payable on 2010 January 21, to stockholders of record on January 10. Give dated journal entries for these.

Answer 1

Calculation of Stock dividend paid

The stock on which a dividend is paid = 1,00,000 - 9,000

                                                             = 91,000

Dividend paid = 91,000 * 2

                       = 1,82,000

Date	Account Title & Explanation	Debit$	Credit$
21 - Jan -10	Dividend Declared A/C	1,82,000
	To Dividend Payable A/C		1,82,000
	(To record declaration of cash Dividend)
	Dividend Payable A/C	1,82,000
	To Cash A/C		1,82,000
	(To record payment of cash dividends

 

Answer to the above question clearly shown in the explanation option