Bookmarks ESCI 1 11 Quiz 10F aIFll Recoraing DiviGenas and Preparing a Statement

Question

Bookmarks ESCI 1 11 Quiz 10F aIFll Recoraing DiviGenas and Preparing a Statement or Retained Earnings The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $270,000 in the current year. It also declared and paid dividends on common stock in the amount of $1.30 per share. During the current year, Sneer had 1 million common shares authorized; 470,000 shares had been issued; and 253,000 shares were in treasury stock. The opening balance in Retained Earnings was $730,000 and Net Income for the current year was $230,000. Required: 1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Record the declaration of a cash dividend of $270,000 to the preferred stockholders. 1 2 Record the payment of the cash dividend to the preferred Record the declaration of a cash dividend of $1.30 per share to the common stockholders payable on the shares outstanding 3 Record the payment of the cash dividend to the common stockholders. 4 Note : -journal entry has been entered Record entry Clear entry esc FI F2 4 F3 F5 2

Explanation / Answer

1 Dividends 270000        Dividends payable 270000 Dividends payable 270000          Cash 270000 Dividends 282100        Dividends payable 282100 Dividends payable 282100          Cash 282100 2 Statement of Retained Earnings Retained Earnings, January 1 730000 Plus:    Net Income 230000 Less:   Dividends on Preferred Stock -270000 Dividends on Common Stock -282100 Retained Earnings, December 31 407900 3 Retained Earnings 552100          Dividends 552100

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