On January 1, Flounder Corp. had 61,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.
|Apr. 1||Issued 11,700 additional shares of common stock for $12 per share.|
|June 15||Declared a cash dividend of $1.90 per share to stockholders of record on June 30.|
|July 10||Paid the $1.90 cash dividend.|
|Dec. 1||Issued 5,200 additional shares of common stock for $13 per share.|
Declared a cash dividend on outstanding shares of $2.30 per share to stockholders of record on December 31.
|Date||account and explanation||debit||credit|
|Apr 1||Cash (11700*12)||140400|
|Paid in capital in excess of stated value-Common Stock||93600|
|June 15||Cash dividend (73200*1.9)||139080|
|July 10||Dividend payable||139080|
|Dec 1||Cash (5200*13)||67600|
|Paid in capital in excess of stated value-Common Stock||46800|
|Dec 15||Cash dividend (78400*2.3)||180320|
|Dec 31||No entry|
b) At the end dividend will be closed in retained earnings and retained earning decrease by total dividend amount but dividend payable is recorded at current liabilities in balance sheet
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