Question

Lavender Company has 3,500,000 outstandning ordinary shares with a par value of $1, on December 5,...

Lavender Company has 3,500,000 outstandning ordinary shares with a par value of $1, on December 5, 2017 the company has declared 30% cash dividends of the par payable on February 4, 2018.

Requiment:

1-Prepre the decleration and payment enrties for each of the date above, assuming the dividends represent distrubution of profit.

2-Ignoring above requirement, Prepre the decleration and payment entries for each of the date above, assuming the dividends above has partial return of capital which equal to $250,000.

Homework Answers

Answer #1
1-Declaration and payment enrties , assuming the dividends represent distrubution of profit
Dec 5,2017 Debit Credit
Retained Earnings 1050000
Dividends Payable 1050000
(3500000 shares*$ 1*30%)
Feb 4,2018
Dividends Payable 1050000
Cash 1050000
2-Declaration and payment enrties , assuming the dividends are partial return of capital
Dec 5,2017
Additional Paid-in-capital 250000
Retained Earnings 800000
Dividends Payable 1050000
(3500000 shares*$ 1*30%)
Feb 4,2018
Dividends Payable 1050000
Cash 1050000
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Kirchner Company has 50,000 shares of $10 par value, 6% preferred stock and 300,000 shares of...
Kirchner Company has 50,000 shares of $10 par value, 6% preferred stock and 300,000 shares of $1 par value common stock outstanding. As of December 31, 2018, it had $900,000 of Retained earnings. On December 31, 2019, the Board of Directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared in 2017 and 2018 and no dividends were in arrears prior to 2017. The company is considering the following options. Option...
On January 1, 2020, Samsung Corporation has 400,000 shares of $3 par value common stock outstanding....
On January 1, 2020, Samsung Corporation has 400,000 shares of $3 par value common stock outstanding. On the same date the corporation’s board of directors declares a 12% stock dividend to be issue on March 2, 2020. On the declaration date, the corporation’s common stock fair market value is $4. On declaration date, the corporation will record: * Debit Stock Dividend $144,000 Debit Stock Dividend $192,000 Credit Stock Dividend $144,000 Credit Stock Dividend $192,000 A Company has 30,000 shares of...
1,400,000 shares of no-par common stock were authorized; 327,000 shares were issued on January 1, 2016,...
1,400,000 shares of no-par common stock were authorized; 327,000 shares were issued on January 1, 2016, at $30 per share. 426,000 shares of $90 par value, 10.00% cumulative, preferred stock were authorized, and 130,000 shares were issued on January 1, 2016, at $133 per share. Net income for the years ended December 31, 2016, 2017, and 2018, was $4,680,000, $7,040,000, and $9,160,000, respectively. No dividends were declared or paid during 2016 or 2017. However, on December 17, 2018, the board...
Apple Inc. was incorporated in January 2016 and has 30,000 shares of $10 par value, 15%,...
Apple Inc. was incorporated in January 2016 and has 30,000 shares of $10 par value, 15%, preferred stock outstanding; and 150,000 shares of $5 par value common stock outstanding. Apple has declared and paid cash dividends each year as shown below. Calculate the total dividends distributed to each class of stockholders under each of the assumptions given.    Assuming Preferred Stock Is Cumulative Assuming Preferred Stock Is Non-cumulative Year Cash Dividends Declared and Paid Preferred Dividend Common Dividend Preferred Dividend...
A Company has the following shares of stock outstanding: Common stock, $1 par value 100,000 shares...
A Company has the following shares of stock outstanding: Common stock, $1 par value 100,000 shares 10% Preferred stock, cumulative, $2 par value 200,000 shares The company had been very profitable until 1992, when its business and profits decreased. In 2015, for the first time in its history, the company was unable to pay all of its required dividends. The board of directors declared the following amounts of dividends during 2015, 2016, and 2017: 2015 $0 2016 75,000 2017 50,000...
Selected transactions of Eller Company are listed below.     1.    Ordinary shares are sold for cash...
Selected transactions of Eller Company are listed below.     1.    Ordinary shares are sold for cash above par value.     2.    Bonds payable are issued for cash at a discount.     3.    Interest receivable on a current note receivable is collected.     4.    Land is sold for cash at book value.     5.    Accounts payable are paid in cash.     6.    Equipment is purchased by signing a 3-year, 10% note payable.     7.    Cash dividends on ordinary shares are declared...
Part II Maria Limited is authorized to sell 1,000,000 its $10 par value ordinary shares. As...
Part II Maria Limited is authorized to sell 1,000,000 its $10 par value ordinary shares. As at the end of the current year, the company has actually sold 500,000 ordinary shares at $15 per share. In addition, of the 500,000 ordinary shares that have been sold, 40,000 shares have been repurchased at $80 per share to be used to meet the future requirements of a share option plan that the company intends to implement. Required: Prepare the general journal entries...
Part II Maria Limited is authorized to sell 1,000,000 its $10 par value ordinary shares. As...
Part II Maria Limited is authorized to sell 1,000,000 its $10 par value ordinary shares. As at the end of the current year, the company has actually sold 500,000 ordinary shares at $15 per share. In addition, of the 500,000 ordinary shares that have been sold, 40,000 shares have been repurchased at $80 per share to be used to meet the future requirements of a share option plan that the company intends to implement. Required: Prepare the general journal entries...
On January 1, 2017, Fairly Company issued 30,000 ordinary shares with a $2 par value for...
On January 1, 2017, Fairly Company issued 30,000 ordinary shares with a $2 par value for $150,000. On March 1, 2017, the company purchased 4,000 ordinary shares for $8 per share for the treasury. On June 1, 2017, 1,000 of the treasury shares are sold for $10 per share. On September 1, 2017, 2,000 treasury shares are sold at $6 per share. Required: Journalize the share transactions of Fairly Company in 2017.
Slaneders & Sons Company has 1,000,000 authorized shares of $20 par value common stock. As of...
Slaneders & Sons Company has 1,000,000 authorized shares of $20 par value common stock. As of June 30, 2012, there were 500,000 shares issued and outstanding. On June 30, 2012, the board of directors declared a $0.30 per share cash dividend to be paid on August 1, 2012. Instructions Prepare the necessary journal entries to be recorded on (a) the date of declaration, (b) the date of record and (c) payment date.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT