On December 31,2008 the board of directors declared the full annual stated cash

Question

On December 31,2008 the board of directors declared the full annual stated cash dividend on the preferred stock and a cash dividend of $1 a share on the common stock the date of record is January 7, 2009 and the payment date is January 15,2009. The corporation charter has authorized 45,000 shares of common stock at a par value of $6.50 per share. At the same meeting, the board appropriated retained earnings to the extent of the cost of the treasury.

1. do I take the 45,000 times $1
2. How do I Journal the appropriated retained earnings and how to I come up with the figure?

Explanation / Answer

I have 2007 retained earnings amount (0.00) and a Partial retained earnings amount for 2008 (54,000) so would I use the one of those figures to figure it out?

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