Question

Gifford Corporation camed net income of $100.000 during the your ended December 31, 2018. On December 15, Getord declared the annual cash dividend on its per share cash dividend on is common stock (40.000 shares with total per value of $400,000). Gifford then paid the dividends on January 4, 2019 preferred stock 120.000 shares with lots par value of $200,000) and a $1.00 Read the requirements Journalire for Gifford Corporation the declaration for the cash dividends on December 15, 2018. (Record debits first, then credits. Exclude explanations from any journal entries. Use only a single account to record the dividends) Journal Entry Accounts Debit Credit Requirements Dec 15 Joumalize the wing for Gord: a. Declaring the cash dividends on December 15, 2018 b. Paying the cash dividends on January 4, 2019 Did retained earnings increase or decrease during 2017 By how much pone [Dono

Answer 1

Dividend declared (amount) = (7% X $200,000) + ($1 X 40,000) = $54,000

Date	Accounts	Debit	Credit
Dec 15, 2018	Retained earnings	$54,000	-
	Dividend payable	-	$54,000
	(To record dividend declared)
Jan 4, 2019	Dividend payable	$54,000	-
	Cash	-	$54,000
	(To record dividend paid)

Retained earnings will reduce with the amount of dividend paid. Retained earnings will reduce by $54,000.