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How does Armada Corporation journalize and report dividends payable in the financial statements?

On January 1, Armada Corporation had 95,000 shares of no-par common stock issued
and outstanding.The stock has a stated value of $5 per share. During the year, the following occurred.

Apr. 1 Issued 15,000 additional shares of common stock for $17 per share.

June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.

July 10 Paid the $1 cash dividend.

Dec. 1 Issued 2,000 additional shares of common stock for $19 per share.

Dec. 15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of
record on December 31.

Instructions
(a) Prepare the entries, if any, on each of the three dividend dates.

(b) How are dividends and dividends payable reported in the financial statements prepared at December 31?

Solution Preview

E12-8 On January 1, Armada Corporation had 95,000 shares of no-par common stock issued
and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred.

Apr. 1 Issued 15,000 additional shares of common stock for $17 per share.

June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30. ...

Solution Summary

This solution provides the journal entries and suggests where the dividends and dividends payable should be reported in the financial statements.

$2.19