Oriole Company declared dividends of $19700 in fiscal 2021 and paid the $41000 dividends that were...

Oriole Company declared dividends of $19700 in fiscal 2021 and paid the $41000 dividends that were declared in fiscal 2020. Oriole paid the 2021 dividends in early fiscal 2022. Which of the following journal entries would NOT be recorded in fiscal 2021?

debit to Dividends Payable and credit to Cash for $41000

debit to Retained Earnings and credit to Cash Dividends for $19700

debit to Dividends Payable and credit to Cash for $19700

debit to Cash Dividends and credit to Dividends Payable for $19700

Solutions

Expert Solution

Option c i.e. debit to Dividends Payable and credit to Cash for $19700 is the Journal entry that will not be posted in Fiscal 2021.

Explanations:

Option a i.e. debit to Dividends Payable and credit to Cash for $41000 is incorrect as this entry will be posted for paying the Dividends for Year 2020 in Year 2021.

Option b i.e. debit to Retained Earnings and credit to Cash Dividends for $19700 is incorrect as this entry will be the closing entry for the dividend expenses recorded for Year 2021 which will be posted while closing the books for Year 2021.

Option c i.e. debit to Dividends Payable and credit to Cash for $19700 is correct as this dividend will be paid in the Year 2022. So no entry of cash payment of dividend expenses of Year 2021 will be posted in Year 2021.

Option d i.e. debit to Cash Dividends and credit to Dividends Payable for $19700 is incorrect as this entry will be recorded in Year 2021 as the journal entry for dividends declared in the Year 2021.

ekkarill92 answered 1 year ago

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