Most corporations make an annual cash payment to their common shareholders. This is called a dividend. If Livingston Company declared and paid a dividend of $5 per share, and if it had 100,000 shares of common stock outstanding, the dividend would be $ .

The journal entry to record the effect of this distribution on Cash and Retained Earnings would be:

Dr. . . . . . .
Cr. . . . . . . . . . . . . . . . . . . . . . . . . . . . .