On May 1, Year 1, Love Corporation declared a $61,500 cash dividend to be paid on...

On May 1, Year 1, Love Corporation declared a $61,500 cash dividend to be paid on May 31 to shareholders of record on May 15.

Required
a. Record the events occurring on May 1, May 15, and May 31 in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event.

b. Prepare journal entries for all events associated with the dividend.

Solutions

Expert Solution

LOVE Corporation

Horizontal Statement Model

Balance sheet

Income Statement

Statement of cash flows

Date

Assets

Liabilities

Common Stock

Retained Earnings

Revenue

Expense

Net Income

May 1

61,500

(61,500)

May 15

May 31

(61,500)

Financing activity

Date	Account title and explanation	Debit	Credit
May 1st	Retained earnings	$ 61,500
	Dividend payable		$ 61,500
	(Entry to record declaration of dividend)
May 15th	No entry

May 31st	Dividend payable	$ 61,500
	Cash		$ 61,500
	(Entry to record payment of dividend declared)

ekkarill92 answered 1 year ago

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