Question

1. Burlon Printing Company has net income of $175,000 for the year each 6/30/2009, the board of directors met and declared a dividend of $0.35 per share for each of the 150,000 outstanding shares of common stock.  The board voted to make the actual distribution on September 1 to all shareholders of record as of August 1.  What is the (a) declaration, (b) date of record, and (c) the date of payment? If Burlon Printing Company were to prepare a balance sheet on July 31, 2009, how would it report the dividends (if at all)?

Answer 1

Date	Account Titles & Explanation	Debit	Credit
(a)
June 30	Retained Earnings	$52500
	Dividend payable		$52500
	(To record of Dividend declared on 150000 shares @ $0.35)
(b)
Aug 01	No Entry	0
			0
(c)
Sept 01	Dividend payable	$52500
	Cash		$52500
	(To record payment of Dividend)

Balance sheet(Partial)
As at July 31 ,2009
Asset	Amount	Liabilities	Amount
		Current Liabilities:
		Dividend Payable	$52500