declaration), and paid out on another date (payment date). Dividend Payout Ratio = Annual Dividend Amount/ Annual Net Income When Dividends are DECLARED they become a liability o Dr. Retained Earnings o Cr. Dividends Payable When Dividends are PAID o Dr. Dividends Payable o Cr. Cash
Deferred Tax Liabilities
Liabilities on Balance Sheet
Broken down as current or long term
Long term debt that matures within a year moves to current debt
common or preferredstock. Payment of dividends. Interest payments on debt. Re-acquisition of shares of common or preferredstock (treasury shares).
Structure of cash flow statement
Comparative Statement of Cash Flows
Year Ended 31 January
| Dividends | Declaration date |
Payment date | Par value | Double taxation |
No-par value stock | Privately held corporation | Publicly held corporation |
Retained earnings | Paid-in capital | Limited liability |
Statement of stockholders’ equity | | |
Concepts and Techniques to Master...
the necessary entries to properly account for a corporation’s share transactions. This problem involves such concepts as shares sold for cash, noncash stock transactions, and declaration and distribution of share dividends. The student is required to prepare the respective journalentries and the...
before and after the issuance of StockDividends.
StockDividend creates no liability but an addition to the SHE section:
- If 20% or higher, the par/stated value is capitalized and debited to RE.
- If lower than 20%, the FV of the stock at the date of declaration is capitalized...
the declaration and
payment of cash dividends on both preference and ordinary shares. This problem also involves a
dividend arrearage on preference stock, which will be satisfied by the issuance of treasury shares. The
student is required to prepare the necessary journalentries for the dividend...
stock on this date, get dividend.
3.) Payment Date: Dividend paid.
Dr. Dividends Payable
EXAMPLE 9: UPS DIVIDEND ANNOUNCEMENT
UPS Board Announces Quarterly Dividend
ATLANTA--(BUSINESS WIRE)--May. 2, 2013-- The UPS (NYSE: UPS) Board of Directors today...
opportunity to prepareentries to properly account for a series of transactions involving the issuance and exercise of commonstock rights and detachable stock warrants, plus the granting and exercise of stock options. The student is required to prepare the necessary journalentries to record these...
market value takes into account expected future earnings, growth, dividends, and other industry and economic factors.
Serial Problem — SP 13
Serial Problem — SP 13, Business Solutions (25 minutes)
1a. Journalentry for issuance of commonstock to Cicely
by formal journalentries
1. DEBIT-retained earnings
2. CREDIT-retained earnings appropriated for...
Increases and decreases in cash from investors and creditors
Sale and purchase of treasury stock
Payments of dividendsPayments of...
the future. (p. 183)
Creditors Individuals or organizations entitled to receive payments.
Cumulative preferredstockPreferredstock on which undeclared dividends accumulate until paid; common stockholders cannot receive dividends until cumulative dividends are paid. (p. 519)
TIME AND PURPOSE OF PROBLEMS
Problem 16-1 (Time 35–40 minutes)
Purpose—to provide the student with an opportunity to prepareentries to properly account for a series of transactions involving the issuance and exercise of commonstock rights and detachable stock warrants, plus the...
45,000 of its $3 par value
shares of commonstock, when the fair price is $4/share, for 100% of the
commonstock of Supernova Company. Redstar incurred direct acquisition
costs of $5,000 and stockissuance costs of $5,000.
a. What journalentry will Redstar Corporation record for the...
DIVIDENDS ON COMMONSTOCK
There are two requirements to be met for CASH dividends to be declared and paid.
1. Sufficient cash to pay the dividend
2. Sufficient retained earnings
Date of declaration
Date of record
Date of payment
GTP declares a...
3. Prepare all necessary journalentries, from issuance through the January 1, 2011 bond retirement.
Date Account Debit Credit...
known as Capital Surplus and Capital in Excess of Par Value.
2. Preferredstock is like commonstock in that dividends are not a legal obligation until the board of directors declares them.
3. Before a liquidating company can distribute any assets to...
preferred shares, both payable on October 30, 20x5, to shareholders of record on October 10, 20x5. (Record the dividenddeclaration and payment.) $230,000,000 50,000,000
Required: Preparejournalentries to record the various transactions. Round per share amounts to two decimal places...
CommonStock (10 * $5) (() 50
PIC in Excess of Par - Common (10 * $3) (() 30
6. Sold 50 shares of $10 par value preferredstock for a total of $500.
Price paid per share = $500 / 50 = $10
• Excess paid per share = $10 - 10 = $0
tax) | 390,000 |
| Loss on the disposition of the wholesale division (net of tax) | 440,000 |
| Loss on operations of the wholesale division (net of tax) | 90,000 |
| Dividends declared on commonstock | 250,000 |
| Dividends declared on preferredstock | 80,000 |
Prepare a multiple...