Question
On January 3 rd of 2020, the Board of Directors of XYZ Corporation decided and declared a property dividend to be distributed on March 10
On January 3rd of 2020, the Board of Directors of XYZ Corporation decided and declared a property dividend to be
distributed on March 10th 2020. The dividend consisted of 10,000 common shares of the companys investment in ABC
company. The shares had originally been purchased at $6 per share and had a $1 par value. On Jan. 3rd, 2020, the market
value per share of the ABC company was $12. XYZ declared the property dividend.
36- On January 3, the appropriate journal entry to make is:
Debit Credit
| A) | Retained earnings or (dividend declared) | 100,000 |
|
|
| Property dividends distributable |
| 100,000 |
|
|
|
|
|
| B) | Retained earnings or (dividend declared) | 100,000 |
|
|
| Property dividends distributable |
| 60,000 |
|
| Gain on appreciation of investment in ABC |
| 40,000 |
|
|
|
|
|
| C) | Investment in ABC | 40,000 |
|
|
| Gain on appreciation of investment in ABC |
| 40,000 |
|
| Retained earnings or (dividend declared) | 100,000 |
|
|
| Investment in ABC |
| 100,000 |
|
|
|
|
|
| D) | None of the above |
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Using Microcomputers In Managerial Accounting
Authors: George Hildebrand
1st Edition
0938188275, 978-0938188278
