Question

Exercise 15-12

Crane Corporation has 11.00 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 78 cents per share cash dividend to stockholders of record as of June 14, payable June 30.

Prepare the journal entries for each of the dates above assuming the dividend represents a distribution of earnings. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date
Account Titles and Explanation
Debit
Credit

6/1
6/14
6/30

6/1
6/14
6/30

6/1
6/14
6/30

SHOW LIST OF ACCOUNTS
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How would the entries differ if the dividend were a liquidating dividend? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date
Account Titles and Explanation
Debit
Credit

6/1
6/14
6/30

6/1
6/14
6/30

6/1
6/14
6/30

Answer 1

Answer Part 1

Cash dividend to stockholders

Journal Entries

Date	Account Titles and Explanation	Debit ($)	Credit ($)
June 1	Retained Earnings ($11,000,000 * 78 %)	8,580,000
	Dividends Payable		8,580,000
June 14	No Entry	0
June 30	Dividends Payable	8,580,000
	Cash		8,580,000

Answer Part 2

Liquidating dividend to stockholders

Journal Entries

Date	Account Titles and Explanation	Debit ($)	Credit ($)
June 1	Additional Paid in Capital ($11,000,000 * 78 %)	8,580,000
	Dividends Payable		8,580,000
June 14	No Entry	0
June 30	Dividends Payable	8,580,000
	Cash		8,580,000