Berkwild Company is authorized to issue 1,000,000 shares of common stock . At the beginning of 2009,

Question:

Berkwild Company is authorized to issue 1,000,000 shares of common stock. At the beginning of 2009, Berkwild had 338,000 issued and outstanding shares. On July 2, 2009, Berkwild purchased 1,310 shares of common stock for its treasury. On March 1 and September 1, Berkwild declared a cash dividend of $1.10 per share. The dividends were paid on April 1 and October 1.

Required:

1. Prepare the entries to record the declaration of the two cash dividends.

2. Prepare the entries to record the payment of the two dividends.

3. Explain why the amounts of the two dividends are different.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...