Poundcake Company owns 10,000 shares (10% of total shares) of Joshua, Inc. Joshua declares and pays...
Poundcake Company owns 10,000 shares (10% of total shares) of
Joshua, Inc. Joshua declares and pays a cash dividend of $0.50 per
share. Poundcake first records dividends when cash is
received.
Upon receipt of the cash dividend, what entry should Poundcake
make?
Select one:
A.
|
Cash |
5,000 |
|
Stock Investment—Joshua |
5,000 |
B.
|
Cash |
5,000 |
|
Dividend Income |
5,000 |
C.
|
Dividends Receivable |
5,000 |
|
Dividend Income |
5,000 |
D.
|
Cash |
5,000 |
|
Dividends Receivable |
5,000 |
Note: It's not D.
Homework Answers
The journal entry to record the receipt of cash dividend is as follows:
Cash account------------------Dr------------$5,000
Dividend income---------Cr---------------$5,000
Therefore, option B is correct.
Where,
Dividend income = 10,000 shares * 0.50 per share
= $5,000
Add Answer to:
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