intermediate accounting-ch15.pptVIP

Cash dividends. Property dividends. LO 7 Identify the various forms of dividend distributions. Types of Dividends Dividends require information concerning three dates: Date of declaration Date of record Date of payment Liquidating dividends. Stock dividends. Reminder – Dividends are NEVER paid on Treasury Stock. Illustration: What would be the journal entries made by a corporation that declared a $50,000 cash dividend on March 10, payable on April 6 to shareholders of record on March 25? March 10 (Declaration Date) Retained earnings 50,000 Dividends payable 50,000 March 25 (Date of Record) April 6 (Payment Date) Dividends payable 50,000 Cash 50,000 Debit Credit LO 7 Identify the various forms of dividend distributions. Cash Dividend No entry LO 10 Explain the accounting for preferred stock dividends. Preferred Stock - Cash Dividend BE15-15 N has outstanding 10,000 shares of $100 par value, 6% preferred stock and 60,000 shares of $10 par value common stock. The preferred stock was issued in January 2010, and no dividends were declared in 2010 or 2011. In 2012, N declares a cash dividend of $300,000. How will the dividend be shared by common and preferred stockholders if the preferred is (a) noncumulative and (b) cumulative? (a) Noncumulative: (b) Cumulative: Total Dividend $300,000 $300,000 To Preferred:2012 60,000 60,000 (10,000sh x $100 x 6%) 2010 2011 0 120,000 To Common: $ 240,000 $120,000 LO 10 Explain the accounting for preferred stock dividends. Preferred Stock - Cash Dividend BE15-15 Variation N has outstanding 10,000 shares of $100 par value, 6% preferred stock and 60,000 shares of $10 par value common stock. The preferred stock was issued in January 2010, and no dividends were declared in 2010 or 2011. In 2012, N declares a cash dividend of $300,000. How will the dividend be shared by common and preferred stoc