Cash dividend and liquidating dividend


Alpha Corporation has 25 million shares of common stock issued and outstanding. On August 31 the board of directors voted a $1.20 per share cash dividend to stockholders of record as of September 5, payable September 30.

Instructions

(a) Prepare the journal entry for each of the dates above assuming the dividend represents a distribution of earnings.

(b) How would the entry differ if the dividend were a liquidating dividend?

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Accounting Basics: Cash dividend and liquidating dividend
Reference No:- TGS0512897

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