Sweet Dreams Chocolatiers Ltd. began operations on January 1, 2016. During its first year, the...
Question:
Sweet Dreams Chocolatiers Ltd. began operations on January 1, 2016. During its first year, the following transactions occurred:
1. Issued common shares for $200,000 cash.
2. Purchased $475,000 of inventory on account.
3. Sold inventory on account for $640,000. The original cost of the inventory that was sold was $380,000.
4. Collected $580,000 from customers on account.
5. Paid $430,000 to suppliers for the inventory previously purchased on account.
6. Bought a delivery vehicle for $36,000 cash.
7. Paid $26,000 for rent, including $2,000 related to the next year.
8. Incurred $20,000 of operating expenses, of which $18,000 was paid.
9. Recorded $2,000 of depreciation on the vehicle.
10. Declared and paid dividends of $6,000.
Required:
Prepare journal entries to record each of the above transactions.
Cash Dividend:
There are 3 dates that are important in the case of cash dividends. The dividend-declared date is the date at which the company declared the dividend. The dividend record date is the date at which a company checks its records for eligible shareholders. The dividend payment date is the date at which the dividend is paid to the shareholders.
Answer and Explanation: 1
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View this answerThe journal entries to record each of the transactions are shown below.
| Sr. No. | Particulars | Debit ($) | Credit ($) |
|---|---|---|---|
| 1 | Cash | 200,000 | |
| To share capital | 200,... |
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Cash Dividends & Dividend Payment
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Dividends are incentives in the form of payments to shareholders of a company. Explore the different types of dividends and the standard method of payments that they occur in.
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