Question

Exercise 15-12 Sage 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit 6/16/146/30 6/16/146/30 6/16/146/30 SHOW LIST OF ACCOUNTS LINK TO TEXT

How would the entries differ if the dividend were a liquidating dividend? (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit 6/16/146/30 6/16/146/30 6/16/146/30

Answer 1

1	Date	Account Titles and Explanation	Debit	Credit
	6/1	Retained Earnings	$9,500,000		(12,500,000 x $0.76)
		Dividend Payable		$9,500,000
	6/14	No entry required
		No entry required
	6/30	Dividend 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
		Dividend Payable		$9,500,000
	6/14	No entry required
		No entry required
	6/30	Dividend Payable	$9,500,000
		Cash		$9,500,000