question archive Glenside Corporation earned net income of $97,000 during the year ended December 31, 2014
Glenside Corporation earned net income of $97,000 during the year ended December 31, 2014
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Glenside Corporation earned net income of $97,000 during the year ended December 31, 2014. On December 15, Glenside declared the annual cash dividend on its 6% preferred stock (20,000 shares with total par value of $200,000) and a $0.14 per share cash dividend on its common stock (36,000 shares with total par value
of $360,000). Glenside then paid the dividends on January 4, 2015.
Journalize the following for Glenside Corporation:
a. Declaring the cash dividends on December 15, 2014
b. Paying the cash dividends on January 4, 2015
Did Retained Earnings increase or decrease during 2014? By how much?
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Journal |
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DATE |
ACCOUNT TITLES AND EXPLANATION |
DEBIT |
CREDIT |
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2014 |
|
|
|
|
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Dec. |
15 |
Retained Earnings |
|
|
|
|
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($200,000 × .06) + (36,000 × $.14).......................................................................... |
17,040 |
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|
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Dividends Payable..................................................................... |
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17,040 |
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Declared a cash dividend. |
|
|
|
2015 |
|
|
|
|
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Jan. |
4 |
Dividends Payable..................................................................... |
17,040 |
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|
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Cash................................................................... |
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17,040 |
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Paid the cash dividend. |
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During 2014, Retained Earnings increased by $79,960 (net income of $97,000 - dividends of $17,040).
