Question

On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances:

Accounts Debit Credit Cash $ 44,300

Accounts Receivable 47,700

Supplies 9,100

Equipment 80,000

Accumulated Depreciation $ 10,600

Accounts Payable 16,200

Common Stock, $1 par value 16,000

Additional Paid-in Capital 96,000

Retained Earnings 42,300

Totals $ 181,100

During January 2021, the following transactions occur: January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000. January 9 Provide services to customers on account, $18,800. January 10 Purchase additional supplies on account, $6,500. January 12 Purchase 1,100 shares of treasury stock for $19 per share. January 15 Pay cash on accounts payable, $18,100. January 21 Provide services to customers for cash, $50,700. January 22 Receive cash on accounts receivable, $18,200. January 29 Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.) January 30 Resell 700 shares of treasury stock for $21 per share. January 31 Pay cash for salaries during January, $43,600. The following information is available on January 31, 2021. Unpaid utilities for the month of January are $7,800. Supplies at the end of January total $6,700. Depreciation on the equipment for the month of January is calculated using the straightline method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $11,600. (Hint: Start with the cost of the Equipment shown at the top.) Accrued income taxes at the end of January are $2,700.

Question: Record the declaration of a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.)

Answer 1

	Account	Debit	Credit
jan 2	cash	40000
	common stock		2000
	additional paid in capital		38000
jan 9	accounts recivables	18800
	service revenue		18800
jan 10	supplies	6500
	accounts payable		6500
jan 12	treasury stock [1100*19]	20900
	cash		20900
jan 15	accounts payable	18100
	cash		18100
jan 21	cash	50700
	service revenue		50700
jan 22	cash	18200
	accounts receivables		18200
jan 29	dividends [16000+2000-1100]*0.20	3380
	dividends payable		3380
jan 30	cash [700*21]	14700
	treasury stock [700*19]		13300
	additional paid in capital		1400
jan 31	salaries expense	43600
	cash		43600

jan 31	utilies expense	7800
	utilities payable		7800
jan 31	supplies expense [9100+6500-6700]	8900
	supplies		8900
jan 31	depreciation expense [80000-11600]/3*1/12	1900
	accumulated depreciation		1900
jan 31	income tax expense	2700
	income tax payable		2700