Question

Weaver Corporation had the following stock issued and outstanding at January 1, Year t: 1. 134,000 shares of $7 per common stock 2. 6,500 shares of $80 par, 7 percent, noncumulative preferred stock On June 10, Weaver dividend for the common shareholders. The dividends will be paid on July 1 to the shareholders of record on June 20 Corporation declared the annual cash dividend on ts 6,500 shares of preferred stock and a $4 per share Required a. Determine the total amount of dlvidends to be paid to the preferred sharehoiders and common shareholders b. Prepare general journal entries to record the declaration and payment of the cash dividends (If no entry is required for a select "No journal entry required" in the first account field 1 On June 10, Weaver Corporation declered the annual a $4 per share dividend for the common sharehoiders 2 The shareholders on record on June 20 wil receive a stock and cash dividend on its 6,500 shares of preferred es mmon dividend payment to be paid July 1 On July 1, the dividends are paid to the shareholders of record on June 20 3 4 On December 33, the closing entry for dividends is recorded

Answer 1

a. Total amount of dividend to be paid to preferred shareholders and common shareholders is:

preferred shareholders 6,500*80*7% = 36,400

Common Shareholders 134,000*4 = 536,000

Total amount to be paid is 572,400

b. Journal entries are:

Date	Particulars	L.F	Amount ($)	Amount ($)
20XX
Jun-10	Dividend expense		572,400
	Dividend payable			572,400
	(for dividend declared)
	Preferred Stock 6,500*80*7%
	Common stock 134,000*4
Jun-20	No entry
Jul-01	Dividend Payable		572,400
	Cash			572,400
	(For dividend paid)
Dec-31	Retained Earnings		572,400
	Dividend			572,400
	(For dividend closed to retained earnings)