Download presentation
Presentation is loading. Please wait.
Published byDerick Parsons Modified over 9 years ago
1
Chapter 14, Section 1
2
Capital Stock account is used to record the investment of all stockholders Retained Earnings account is used to record a corporation’s earnings Dividends account is used to record the distribution of a corporation’s earnings to stockholders (similar to Drawing account) (3000) STOCKHOLDERS’ EQUITY 3110Capital Stock 3120Retained Earnings 3130Dividends 3140Income Summary
3
Dividends can only be distributed by formal action of a corporation’s board of directors. The board of directors is a group of persons elected by the stockholders to manage a corporation. Dividends are normally declared on one date and paid on a later date. Once a dividend is declared, the corporation is obligated to pay the dividend—it becomes a liability until paid.
4
December 15. Hobby Shack’s board of directors declared a quarterly dividend of $2.00 per share; capital stock issued is 2,500 shares; total dividend, $5,000.00. Date of payment is January 15. Memorandum No. 79. Debit Normal Balance Dividends 5,000.00 Credit Normal Balance Dividends Payable 5,000.00 What journal? General Journal
5
1 2 3 4 56 December 15. Hobby Shack’s board of directors declared a quarterly dividend of $2.00 per share; capital stock issued is 2,500 shares; total dividend, $5,000.00. Date of payment is January 15. Memorandum No. 79. 4.Write the debit amount. 3.Write the memorandum number. 2.Write the title of the account debited. 1.Write the date. 5.Write the title of the account credited. 6.Write the credit amount.
6
12345 January 15. Paid cash for quarterly dividend declared December 15, $5,000.00. Check No. 379. 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit account. 5. Write the credit amount.
7
retained earnings dividends board of directors declaring a dividend
8
Work Together 14-1 (text pg. 408) On Your Own 14-1 (text pg. 408) Application 14-1 (text pg. 438)
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.