Question

Cullumber Corporation has 12.50 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 76 cents per share cash dividend to stockholders of record as of June 14, payable June 30. Prepare the journal entries for each of the dates above assuming the dividend represents a distribution of earnings. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation

Answer 1

1	Date	Account Titles and Explanation	Debit	Credit
	6/1	Retained Earnings	$9,500,000
		Dividends Payable (12,500,000 shares x $0.76/share dividend)		$9,500,000
	6/14	No entry on the date of record
	6/30	Dividends Payable	$9,500,000
		Cash		$9,500,000
2	Date	Account Titles and Explanation	Debit	Credit
	6/1	Additional Paid in Capital - Common Stock	$9,500,000
		Dividends Payable (12,500,000 shares x $0.76/share dividend)		$9,500,000
	6/14	No entry on the date of record
	6/30	Dividends Payable	$9,500,000
		Cash		$9,500,000