#1
Yes, it's a friday night, and I'm not getting high and playing music unfortunately.

anyways, I'm doing accounting. I thought this would be an easy question but it's troubling me. So, I'm gonna post it here and see if any of yall college students and above (and even below) could help me out:

Record the declaration and payment of a cash dividend, $10,400.


I'm given a general journal to fill out. Simple, I just need titles and which title is debited, which on is debited.
I'm thinking dividends get debited and cash credited? But I just can't do that for some reason. It's probably because I'm doing it wrong.

Anyone wanna help me out??


(yes, I realize this is a guitar forum, but I don't feel like signing up for an accountant forum. I feel like that's a depressing place)
Last edited by SunshineMusicO at Oct 4, 2013,
#3
You're going to have a tough time with your accounting course.

A dividend is declared before it is paid, so you would debit Dividends Declared and credit Dividends Payable on the declaration date, then on the payment date you would debit Dividends Payable and credit Cash. I think Dividends Payable then goes under OE on the P&L statement at the end of the period, but I hated accounting and only did one unit so idk.
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#5
AxeToFall, I've already done that. Didn't help.

AgainstYou, that doesn't work. It's like a dropdown menu I'm given for each title, and there is no title that says anything about dividends >
#6
Did they give you a date for this transaction or say if its at the fiscal ending or something like that? Also what are your options from the drop down menu cause againstyou's reasoning makes sense and is normally the case.
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#7
I can tell you how to do it in Australia but I don't know American standards. The Australian one is basically this

Quote by AgainstYou
You're going to have a tough time with your accounting course.

A dividend is declared before it is paid, so you would debit Dividends Declared and credit Dividends Payable on the declaration date, then on the payment date you would debit Dividends Payable and credit Cash. I think Dividends Payable then goes under OE on the P&L statement at the end of the period, but I hated accounting and only did one unit so idk.


OE doesn't appear on the P&L statement btw. The Dividends Payable appears in Liabilities when declared under the balance sheet.

@OP. Give the titles under the dropdown menu and we might be able to sort something out
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#8
I don't know how it works in America, or if I'm forgetting things, but interim dividends can be declared and paid on the same day. If there's nothing relating to dividends in the journal entry, I'd:

Dr Retained Earnings
Cr Cash

I can't say I'm sure about this. I've never been good at dividends.
#9
Aye, give us the titles under the dropdown menu and I'm sure I can do them for you. BSc Economics student here :P And I loathed accounting though.
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#10
oh god, ok:

No journal entry required
accounts payable
accounts receivable
accrues expenses payable
accumulated depreciation
additional paid in capital
advertising expense
cash
commision expense
common stock
consulting expense
cost of good sold
depreciation expense
equipment
fee revenue
gain on sale of land
income tax expense
income taxes payable
insurance expense
interest expense
interest payable
interest receivabe
interest revenue
inventory
investments
land
long term debt
maintenance expense
notes payable
notes receivable
other assets
prepaid expenses
prepaid rent
property tax expense
property tax payable
remaining expenses
rent expense
rent receivable
repairs expense
salaries expense
service revenue
small tools
supplies
supplies expense
unearned revenue
utilities expense
utilities payable
wages expense
wages payable


Phew.
yeah, there ya go.
#11
Pretty sure you debit dividends until you close it out.

I just took a quiz on Banking Reconciliations. Don't feel too bad.
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Last edited by Zombee at Oct 5, 2013,
#12
i took an accounting class in high school, definitely would off myself if i had to do that shit for a living.

personally, i can't help you, but good luck.
#14
Actually, I just thought to Dr. Investments and Cr. Cash
Hmmm, seems appropriate, but I'v really like to hear from guitarnoob before I submit this shit
#15
http://accounting-financial-tax.com/2009/06/types-of-dividends-and-its-journal-entries/

Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. They are treated as a reduction of contributed capital, either additional paid-in-capital or a special contracontributed capital account, designated as “Contributed Capital Distributed” as a “Liquidating Dividend”.



Case Example

Let’s assume that the Lie Dharma Putra Company issued dividend to its common stockholders of $2,500,000 of which $1,000,000 is considered income and the rest a return of contributed capital. The following journal entries are required:

1. At the date of declaration

[Debit]. Retained Earnings = 1,000,000
[Debit]. Additional Paid-in-Capital = 1,500,000
[Credit]. Dividends Payable = 2,500,000

2. At the date of payment

[Debit]. Dividends Payable = 2,500,000
[Debit]. Cash = 2,500,000


seems like your best bet
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