Question

Handy Harvey is a leading global manufacturer and marketer of power tools, hardware, and home improvement products. A press release contained the following announcement: NEW BRITAIN, Conn.—(BUSINESS WIRE)—Oct. 20, 2016—Handy Harvey (NYSE: SWK) announced today that its Board of Directors approved a regular fourth-quarter cash dividend of $0.58 per common share. This extends the company’s record for the longest consecutive annual and quarterly dividend payments among industrial companies listed on the New York Stock Exchange. The dividend is payable on Tuesday, December 20, 2016, to shareholders of record as of the close of business on Friday, December 2, 2016. At the time of the press release, the company had 303 million shares authorized and 145.3 million outstanding. The par value for the company’s stock is $2.50 per share. Required: 1. & 2. Prepare journal entries as appropriate for each of the three dates mentioned above and to close the dividends account.

Answer 1

Journal

Date	Account title	Debit	Credit
Oct. 20, 2016	Retained earnings	84,274,000
	Dividend payable		84,274,000
Dec.20, 2016	Dividend payable	84,274,000
	Cash		84,274,000

Dividend payable = Number of shares of common stock outstanding x Dividend per share

= 145,300,000 x 0.58

= $84,274,000

No entry is mad on the record date.

Kindly comment if you need further assistance. Thanks