Question

Following is a recent BusinessSoftware Corp. press release: REDMOND, Wash.-March 16, 2016 BusinessSoftware Corp. today announced that its board of directors have declared a quarterly dividend of $0.13 per share. The dividend will be payable on June 9, 2016, to shareholders of record on May 19, 2016. The ex-dividend date will be May 17, 2016 Prepare the journal entries BusinessSoftware Corp. used to record the declaration and payment of the cash dividend for its 9,000 million shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,0o0 should be entered as 10).) Answer is complete but not entirely correct. No Event General Journal Debit Credit Retained earnings 1 1 1,053 Cash dividends payable 1,053 No journal entry required 2 2 Cash dividends payable 3 3 1,053 Cash 1,053

Answer 1

Cash Dividends Payable = 9,000 million shares * $0.13 per share = $1,170 million

Journal Entries will be as follows :

1. Retained Earnings................ Dr. 1,170
   To Cash Dividends Payable.............. 1,170
   
2. No Journal Entry required.
   
3. Cash Dividends Payable....... Dr. 1,170
   To Cash............................................. 1,170