Exercise 11-14A Effect of cash dividends on financial statements LO 11-6 On May 1, Year 1, Love Corporation declared a $63,900 cash dividend to be paid on May 31 to shareholders of record on May 15 Required a. Record the events occurring on May 1, May 15, and May 31 in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA) investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event. (Amounts to be deducted should be indicated with minus sign.) Balance Sheet Income Statement Cash Flow Retained Revenue Common Assets Liabilities + stock - Expense Net Income Date May 1 May 15 May 31 b. Prepare journal entries for all events associated with the dividend. (f no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet On May 1, Love Corporation declared a $63,900 cash dividend to be paid orn May 31 Note: Enter debits before credits. General Journal Debit c Credit Date May 01 Record entry Clear entry View general journal b. Prepare journal entries for all events associated with the dividend. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet The shareholders on record on May 15 will receive a dividend payment to be paid May 31. Note: Enter debits before credits. Debit Date General Journal Credit May 15 Record entry Clear entry View general journal b. Prepare journal entries for all events associated with the dividend. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 On May 31, the dividends are paid to the shareholders of record on May 15 Note: Enter debits before credits. Date Credit General Journal Debit May 31 Record entry Clear entry View general journal b. Prepare journal entries for all events associated with the dividend. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet On December 31, the closing entry for dividends is recorded. Note: Enter debits before credits Date General Journal Debit Credit December 31 Record entry Clear entry View general journal