Problem 10-1Recording Dividends

On August 15, 2019, EasyMoney, Inc.'s Board of Directors meets and declares that EasyMoney will pay a dividend to its stockholders. Each share of EasyMoney's Common Stock will be paid a dividend of $1.25 per share. There are currently 100,000 shares of EasyMoney's Common Stock held by EasyMoney's shareholders.

The following are the facts related to this dividend:

Dividend per Share......................................... $1.25

Date of Declaration....................................... August 15, 2019

Date of Record................................. September 5, 2019

Date of Payment................................. September 20, 2019

The following is a partial list of the accounts in EasyMoney, Inc.'s General Ledger. These are the only accounts you need for this problem.

Cash

Dividends Payable

Retained Earnings

As of August 1, 2019, the Beginning Balance in the Dividends Payable account is $0 and the Beginning Balance in the Retained Earnings account is $625,000.

Requirement 1

A.Record the entry that EasyMoney should make in the General Journal on August 15, 2019 to record the declaration of the dividend.

B.After making and posting the August 15 entry, what are the Current Balances in the:

Dividends Payable account?

Retained Earnings account?

Requirement 2

A.EasyMoney's Accounting Cycle is one month long. EasyMoney's Net Income for the month of August is $52,000. Prepare the Calculation of Retained Earnings as of August 31 for the Balance Sheet.

B.What would be the amount of Dividends Payable on EasyMoney's August 31 Balance Sheet?

Requirement 3

A.Record the entry that EasyMoney should make in the General Journal on September 20, 2019 to record the payment of the dividend.

B.After making and posting the September 20 entry, what is the Current Balance in the:

Dividends Payable account?