The annual mport for Snoor Corporaton dsdlosed that the company doclaned and pai

Question

The annual mport for Snoor Corporaton dsdlosed that the company doclaned and paid praamed dividands inthe amount of S130 000 n curent var, talso declared ???nd paid dividends on common stock in the amount of 5230 parshane. Duing the cumant yoar, Snoor had 1 million common shans authorznd 30,000 shanes had bosueand 127,000 shares wene in breasury stock The opaning balance in Rotained Eamings was $830,000 and Not Incoma for the cument year as $330 DDO Required: 1. Prapan jam? ontries to record the dacaraton, and payment, of dvidends on prtened and lb) commor ock lir no entry is required for In the firat sooount eld) transaotonevent, calegt"No Journal Entry Requlred. Record the dedaration of a cash cividend of $130,000 to the preteted stockholders Reaord the payment of the cash dividend to the preferred/ Record the dedaration of a cach dividend af $2.30 per share to the common stockhoiders payable on the shares outstancing. Record the payment of the cash dividend to the comman Nate:-journal entry has been entered 2. Using the informationgiven above, prepare Docambar 31 statement of ratanad ?nings for the yMr ended atatement of Retained Eamingc Ratainod Eamings, January 1 Ratainod Eamings, Decomber 31 3. Ppann a journal antry to close the dvidands account (If no entry Is required for a rancaotion avent, caleot 'No Journel Entry Required' In the firct soound ield) Journal entry worksheet Record the entry to dose the dividends account. Nota: Entn debits befor

Explanation / Answer

1 Journal entry: Date Account titles and explanation Debit Credit Preferred dividend 130000 Dividend payable 130000 (Preferred dividend declared) Dividend payable 130000 Cash 130000 (Preferred dividend paid) Cash dividend 466900 Dividend payable 466900 (Cash dividend declared) (330000-127000)*2.30 Dividend payable 466900 Cash 466900 (Cash dividend paid) 2 Statement of retained earnings: Retained earnings, January 1 830000 Add: Net income 330000 1160000 Less: Preferred dividend 130000 Cash dividend 466900 596900 Retained earnings, December 31 563100 3 Date Account titles and explanation Debit Credit Retained earnings 596900 Preferred dividend 130000 Cash dividend 466900 (Close dividend accounts)

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