National Chocolate Corp. produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information:
March 5, 2010- National Chocolate Corp. today announced that its Board of Directors has declared a special " one- time" cash dividend of $ 1.00 per share on its one million outstanding common shares. The dividend will be paid on April 30 to shareholders of record at the close of business on March 26.
Required: 1. Prepare any journal entries that National Chocolate Corp. should make as the result of infor-mation in the preceding report. Assume that the company has 1.0 million shares outstanding on March 5, the par value is $ 0.01 per share, and the stock price is $ 10 per share. 2. What two requirements would the board of directors have considered before making the dividend decisions?