Question

Fowler Co.'s balance sheet showed the following at December 31, 2018: Common stock, $10 par $ 107,000 Paid-in capital - excess of par 53,500 Retained earnings 21,400 A cash dividend is declared on December 31, 2018, and is payable on January 20, 2019, to shareholders of record on January 10, 2019.

Required: 1. Prepare all appropriate journal entries, assuming a cash dividend in the amount of $1.00 per share.

Required 2. Prepare all appropriate journal entries, assuming a cash dividend in the amount of $5.00 per share.

Answer 1

1
	Date	Account Titles and Explanation	Debit	Credit
	Dec 31, 2018	Retained Earnings	$10,700		(10,700 x $1)
		Dividend Payable		$10,700
	Jan 10, 2019	No entry required
		No entry required
	Jan 20, 2019	Dividend Payable	$10,700
		Cash		$10,700
2
	Date	Account Titles and Explanation	Debit	Credit
	Dec 31, 2018	Retained Earnings	$21,400
		Paid-in capital—excess of par	$32,100
		Dividend Payable		$53,500	(10,700 x $5)
	Jan 10, 2019	No entry required
		No entry required
	Jan 20, 2019	Dividend Payable	$53,500
		Cash		$53,500