Yougi Corp. is an animation studio operating in South Florida. A recent press re

Question

Yougi Corp. is an animation studio operating in South Florida. A recent press release contained the following information:

April 1—Yougi Corp. today announced that its Board of Directors has declared a cash dividend of $0.40 per share on 685,000 outstanding preferred shares. The dividend will be paid on or before May 31, to preferred shareholders of record at the close of business on May 26. The Company's fiscal year will end on June 30.

Prepare any journal entries that Yougi Corp. should make on the four dates mentioned in the press release. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Yougi Corp. is an animation studio operating in South Florida. A recent press release contained the following information:

Explanation / Answer

Answer :2

Option B The board must consider the balances of retained earnings and cash before declaring a cash dividend.

(because reserve for dividend is made from retained earnings)

Date account titles and explanation debit credit April 1 dividends (68500*0.40) 27400 Dividends payable, preferred 27400 May 26 no journal entry is required May 31 dividends payable, preferred 27400 Cash 27400 June 30 retained earnings 27400 Dividends 27400

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