Problem: The 2009 annual report for Sneer Corporation disclosed that the company

Question

Problem:
The 2009 annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $119.9 million in 2009. It also declared and paid dividends on common stock in the amount of $2 per share. During 2009, Sneers had 1,000,000,000 shares of common authorized; 387,570,300 shares had been issued; 41,670,300 shares were in treasury stock. The balance in Retained earnings was $1,554 million on December 31, 2008, and 2009 Net income was $858 million.

Requirement:
Prepare the journal entry for each transaction:

My Part:                                            Debit         Credit
Dividends declared                     119,900,000
         Dividends payable                                  11 9,900,000
Dividends payable                     119,900,000
          Cash                                                     119,900,000

Dividends declared                            ?
        Dividends payable                                         ? 
Dividends payable                             ?
        Cash                                                           ?

My question:
Please help me complete the journal entry by using the red fonted information. I am at a loss as how to determine the dividends declared for common stock based on those stipulations.

Explanation / Answer

For Common stock dividend will be payable of net shares outstandings =(Total shares issued - shares in Treasury stock) = (387,570,300 - 41,670,300) Dividend payable = (387,570,300 - 41,670,300) x $2 Dividends declared $691,800,000 Dividends payable $691,800,000 Dividends payable $691,800,000 Cash $691,800,000

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