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13 August, 00:08

Fetzer Company declared a $0.35 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:

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  1. 13 August, 03:16
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    The journal entry to record the dividend declaration would be as follows:

    Debit Credit

    retained earnings $63,700

    common dividend payable $63,700

    Explanation:

    According to the given data we have the following:

    shares issued=190,000

    treasury stock=8,000

    cash dividend=$0.35

    Therefore, to prepare the journal entry to record the dividend declaration we would have to calculate the retained earnings as follows:

    retained earnings = (shares issued-treasury stock) * cash dividend per share

    retained earnings = (190,000-8,000) * $0.35

    retained earnings=$63,700

    Hence, The journal entry to record the dividend declaration would be as follows:

    Debit Credit

    retained earnings $63,700

    common dividend payable $63,700
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