Question

On October 25, 2019, The J.M. Smucker Company made the following dividend announcement: The J. M. Smucker Company (NYSE: SJM) today onnounced that its Board of Directors has approved a $0.88 per share dividend on the common shares of the Company. The dividend will be paid on Monday, December 2, 2019, to shareholders of record at the close of business on Friday, November 15, 2019.

1. What is the impact on Smuckers balance sheet related to the dividend on the following dates: a. October 25,2019 b. November 15,2019 c. December 2,2019

Answer 1

October 25, 2019	Dividend announcement is made
	Journal Entry
		Debit	Credit
		$	$
	Retained Earning	0.88
	Dividend payable		0.88
	(Being liability created)
	Impact on Balance Sheet
	As per the above journal entry the Dividend payable account will be shown in current liability account and reatined earning will decrease with the same amount
November 15,2019	Date of Record
	Journal Entry
	No Entry
	Impact on Balance Sheet
	There will not be any impact on the Balance Sheet on this date
December 2,2019	Date of payment
	Journal Entry
		Debit	Credit
		$	$
	Dividend payable	0.88
	Cash		0.88
	(Being Dividend Paid)
	Impact on Balance Sheet
	As per the above journal entry the Dividend payable account will decrese from current liability account and cash will decrease with the same amount in the current assets account
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