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Weaver Corporation had the following stock issued and outstanding at January 1, Year 1:

150,000 shares of $1 par common stock.
15,000 shares of $100 par, 6 percent, noncumulative preferred stock.

On June 10, Weaver Corporation declared the annual cash dividend on its 15,000 shares of preferred stock and a $0.50 per share dividend for the common shareholders. The dividends will be paid on July 1 to the shareholders of record on June 20.

Prepare general journal entries to record the declaration and payment of the cash dividends. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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1.On June 10, Weaver Corporation declared the annual cash dividend on its 15,000 shares of preferred stock and a $0.50 per share dividend for the common shareholders.
2.The shareholders on record on June 20 will receive a dividend payment to be paid July 1.
3.On July 1, the dividends are paid to the shareholders of record on June 20.
4.On December 31, the closing entry for dividends is recorded.

Respuesta :

temmydbrain

Answer:

Check the explanation

Explanation:

A)

Preferred shareholder (15000×$100)×6%                     $90000

Common shareholder (150000×$0.5)                           $75000

Total dividend                                                                  $165000

B)

Date                  journal                                  debit                     credit

10 june                dividend                            $165000  

               To dividend payable                                              $165000

           (To record dividends payable)  

 

20 june             no entry required                  ----                              ----

 

01 july           dividend payable                  $165000  

                         To cash                                                         $165000

           (To record dividend payment)  

 

31 dec.              Retained earning                $165000  

                      To dividends                                                       $165000

            (To close dividend account)  

I have given the complete and detailed solution to your question.

anthougo

Weaver Corporation's General Journal Entries are as follows:

General Journal Entries:

June 10:

Debit Dividends: Preferred Stock $90,000

Debit Dividends: Common Stock $75,000

Credit Dividends Payable $165,000

  • To record the declaration of cash dividends.

June 20: No records required

July 1:

Debit Dividends Payable $165,000

Credit Cash $165,000

  • To record the payment of dividends to shareholders.

December 31:

Debit Retained Earnings $165,000

Credit Dividends: Preferred Stock $90,000

Credit Dividends: Common Stock $75,000

  • To close the dividends accounts to Retained Earnings.

Data Analysis:

Issue and Outstanding Balances on January 1, Year 1:

150,000 shares, Common Stock at $1 par = $150,000

15,000 shares, 6% Noncumulative Preferred Stock at $100 par = $1,500,000

June 10: Dividends: Preferred Stock $90,000 ($1,500,000 x 6%) Common Stock $75,000 (150,000 x $0.50) Dividends Payable $165,000

June 20: No record required

July 1: Dividends Payable $165,000 Cash $165,000

December 31: Retained Earnings $165,000 Dividends: Preferred Stock $90,000 Common Stock $75,000

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