Escolar Documentos
Profissional Documentos
Cultura Documentos
xxxx
Dividends payable
xxxx
xxxx
xxxx
Forms of Dividends
Cash Dividends
The Board Of Directors declared a dividend of 5% per share on June 1, 2015 to
shareholders of record as of July 15, 2015, payable on August 31, 2015. The
corporate records show that there are 100,000 issued shares (10,000 of which are in
the treasury) and there are 30,000 subscribed shares which are not delinquent. The
par value of the shares is P100.
Date of Declaration Declared a dividend of 5% per share on June 1, 2015
Date of Record record as of July 15, 2015
Date of Distribution payable on August 31, 2015
COMPUTATIONS
Issued Shares
100,000
Less: Treasury
(10,000)
90,000
30,000
120,000
P5
Journal ENTRY
Retained earnings(120,000x5)
600,000
600,000
600,000
Cash
600,000
COMPUTATIONS
Issued Shares
100,000
30,000
130,000
P5
Journal ENTRY
Retained earnings(130,000x5)
650,000
650,000
650,000
Property Dividends
Example Problem
650,000
200,000
Example 2
3s Food Industries, Inc. based in Pulilan, Bulacan has 5,000 shares
investment in another entity accounted for as nonmarketable equity
investment. The carrying amount of his investment is P500,000. On dec.
1,2015, this growing food corporation declared as property dividend this
investment to all its outstanding par values shares to be distributed on dec.
15,2015. The market value of the investment at the declaration date was
P950,000. There was no change in fair value on the settlement date.
Date of Declaration: Dec. 1, 2015
Date of Distribution: Dec. 15, 2015
Journal Entries
Retained earnings
950,000
Property Dividends Payable
950,000
TANDAAN: LAGING NASA MARKET VALUE/ FAIR MARKET VALUE
Property Dividends Payable
950,000
Investment in Equity Securities
Gain on Distribution of Property Dividends
500,000
450,000
LIABILITY DIVIDENDS
SCRIP DIVIDENDS. PROMISE TO PAY
WITH ADDITIONAL INTEREST PAID
EXAMPLE: Z Company declared a scrip dividend of P10 on January 30, 2015 to
shareholders of record as of February 16, 2015 payable at 10% interest on
March 31, 2015. The stock transfer book shows 10,000 shares issued and
outstanding on date of record.
Date of declaration: declared a scrip dividend of P10 on January 30, 2015
Date of Record: record as of February 16, 2015 with 10% interest on march 31,
2015
Computation
Issued shares 10,000xP10 =
Interest at 10%(100,000x10%x2/12)
100,000
1,667
101,667
Note. 2 months Jan. 30 to mar. 31 kaya 2/12
Journal Entry
Retained Earnings
100,000
100,000
100,000
1,667
101,667
Stock Dividends
Payment of Dividend
Stock Dividend for Distribution
Share Capital
150,000
150,000
A 20% stock dividend was declared when the market value of the stock was
P150 per share.
Kapag LARGE Stock Dividends. Yung mas mataas sa 20% ang
gagamitin sa Retained Earnings at sa distributions at yung STATED
VALUE Par value. Sa problem na yan P100 par.
JOURNAL ENTRIES
Retained Earnings(20%x10,000sharesxP100)
200,000
200,000
200,000
200,000
ordinary shares.
xxxx
xxxx