I need help with #4 Cash dividends. Corporation’s trial balance at December 31,
ID: 2335224 • Letter: I
Question
I need help with #4 Cash dividends.
Corporation’s trial balance at December 31, 2017, is presented below. All 2017 transactions have been recorded except for the items described below.
Debit Credit Cash $25,500
Accounts Receivable 59,000
Inventory 22,600 Land 65,900 Buildings 99,300 Equipment 35,000 Allowance for Doubtful Accounts $460 Accumulated Depreciation—Buildings 31,500 Accumulated Depreciation—Equipment 15,800 Accounts Payable 19,300 Interest Payable –0– Dividends Payable –0– Unearned Rent Revenue 8,400 Bonds Payable (10%) 46,000 Common Stock ($10 par) 26,000 Paid-in Capital in Excess of Par—Common Stock 5,200 Preferred Stock ($20 par) –0– Paid-in Capital in Excess of Par—Preferred Stock –0– Retained Earnings 43,740 Treasury Stock –0– Cash Dividends –0– Sales Revenue 612,000 Rent Revenue –0– Bad Debt Expense –0– Interest Expense –0– Cost of Goods Sold 401,000 Depreciation Expense –0– Other Operating Expenses 36,000 Salaries and Wages Expense 64,100 Total $808,400 $808,400
Unrecorded transactions and adjustments:
1. On January 1, 2017, Quigley issued 1,100 shares of $20 par, 6% preferred stock for $25,300.
2. On January 1, 2017, Quigley also issued 1,200 shares of common stock for $26,400.
3. Quigley reacquired 270 shares of its common stock on July 1, 2017, for $46 per share.
4. On December 31, 2017, Quigley declared the annual cash dividend on the preferred stock and a $1.30 per share dividend on the outstanding common stock, all payable on January 15, 2018.
5. Quigley estimates that uncollectible accounts receivable at year-end is $5,900.
6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $4,800.
7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $3,500.
8. The unearned rent was collected on October 1, 2017. It was receipt of 4 months’ rent in advance (October 1, 2017 through January 31, 2018).
9. The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2017, has not been paid or recorded.
Explanation / Answer
4) Journal entry :
Date account and explanation debit credit Dec 31, 2017 Cash dividend 5909 Preferred dividend payable (1100*20*6%) 1320 Common dividend payable (2600+1200-270)*1.30 4589 (To record dividend declared)Related Questions
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