Problem C Recording the declaration, payment/distribution of dividends.

1. ABC Reading Corporation has an authorized share capital of 30,000 shares with par value of 20 per share. 18,000 shares are issued including treasury shares of 500. On December 31, 200C, the company has retained earnings of 270,000. On this date, the board of directors declare 20% cash dividends payable on February 15, 200D to all shareholders of record as of January 15, 200D.

REQUIRED: Journalize the declaration and payment of cash dividends.

2. XYZ Corporations board of directors voted to distribute some of its inventories to the shareholders as dividends. Each share capital was entitled to receive merchandise costing 3,000 with a fair market value of 5,000. The property dividends were declared on December 31 200B to be distributed on January 31, 200C to all shareholders of record as of January 15, 200C. There were 50 shares outstanding on December 31, 200B.

REQUIRED: Journalize the declaration and distribution of property dividends.

3. On December 31, 200D, the board of dire3ctors of Autumn Corporation during its annual stockholders meeting declared a dividend of 25 per share on all of its outstanding shares. On this date, the corporations issued shares totaled 14,000, however, 4,000 shares were in the treasury. Because of the companys commitment to its long-term creditors, some of its cash were set aside for the payment of these liabilities. Hence, the board of directors voted to issue scrip dividends on January 31, 200E payable on March 31, 200E to all stockholders of record as of January 15, 200E. The scrip dividends carry an interest rate of 18% per annum.

(Scrip or liability dividends are payable in scrip, or promissory notes, and will be paid at some future date. The effect of scrip dividends is to extend the payment of dividends. The scrip may or may not be interest bearing.)

REQUIRED: Journalize the declaration, issuance, and payment of dividends.

4. ABC Corporations share capital accounts on December 31, 200C showed the following:

12% Preference Share Capital, par 100, authorized 10,000 shares, issued 4,000 shares	400,000
Ordinary Share Capital, par 30, authorized 100,000 shares, issued 20,000 shares	600,000

On this date, the Board of Directors declared cash dividends of 260,000. No dividends were declared since 200A.

REQUIRED:

Determine the total dividends and dividends per share for both preference and ordinary shares, using the following format

	PREFERENCE	ORDINARY	DIVIDENDS
FIXED
REMAINDER
TOTAL
OUTSTANDING SHARES
Dividends Per Share