Question

Record the entry for the declaration of dividends ( not payment) for each of the four separate scenarios.

1. On April 1, 2020 Apex Corporation declared a cash dividend of $5.00 per share on its 32,000 outstanding shares of common stock ($1 par). The dividend is payable on April 21, 2018, to stockholders of record on April 20, 2018.
2. Axe Co. has issued and outstanding 1,000 shares of $100 par, cumulative, 5% preferred stock and 20,000 shares of $5 par common share. Dividends are in arrears for the past year (not including the current year). On December 15, 2018, the board of directors of Axe Co. declared dividends of $25,000 to be paid to shareholders at the end of its fiscal year. Use two separate liability accounts – one for Common Stock and one for Preferred Stock.
3. SAX Corp. holds 1,000 shares of Mobile Co. common stock, purchased at the beginning of the year for $30 per share (carrying value on February 1,2018). On February 1, 2020, SAX Corp. declared a property dividend of 450 shares of Mobile Co. common stock when the shares were selling at $28 per share. (Two journal entries required)
4. Trunk Corporation declared a common stock dividend of $45,000 on April 1, 2020. Trunk Corporation announced to shareholders that 70% of the dividend amount was a return of capital.

Answer 1