Exercise 15-12 Flounder Corporation has 10.90 million shares of common stock iss

Question

Exercise 15-12 Flounder Corporation has 10.90 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 72 cents per share cash dividend to stockholders of record as of June 14, payable June 30 Prepare the journal entries for each of the dates above assuming the dividend represents a distribution of earnings. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) D Accest Tifles and Explanatinn SHOW LIS How would the entries differ if the dividend were a liquidating dividend? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Dake Account Titles and Esplasation LIST OF ACCOUNTS Question Attempts: 00, 6 used M" Poa "m"

Explanation / Answer

1) Journal Entries, if the dividend is treated as distribution of earnings :

2) Journal Entries, if the dividend is treated as liquidating dividend :

Date Accounts Titles and explanation Debit $ Credit $ June 1 Retained Earnings 7,848,000 Dividend Payable 7,848,000 (being 72 cents dividend declared on 10.90 m outstanding common shares) June 14 No entry June 30 Dividend Payable 7848000 Cash 7848000 (being the dividend paid)   

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