The board of directors of Capstone Inc. declared a $.90 per share cash dividend
ID: 2471005 • Letter: T
Question
The board of directors of Capstone Inc. declared a $.90 per share cash dividend on its $1 par common stock. On the date of declaration, there were 43,000 shares authorized, 16,000 shares issued, and 5,000 shares held as treasury stock. What is the entry for the dividend declaration?
The board of directors of Capstone Inc. declared a $.90 per share cash dividend on its $1 par common stock. On the date of declaration, there were 43,000 shares authorized, 16,000 shares issued, and 5,000 shares held as treasury stock. What is the entry for the dividend declaration?
Explanation / Answer
Shares = 16000-5000 = 11000 shares
Dividend = 11000*$0.90 = $9900
Retained earnings 9900
Common dividends payable. 9900