Dutchman's Conestoga is a large, publicly traded sports store headquartered in Pretoria, South Africa. Dutchman's Conestoga has a year end of December 31, has 100,000 common equity shares outstanding, and declared dividends on December 25 of R2.50 per common equity share. The date of record is January 1, and the date of payment is February 15. The financial statements have not been authorized for issuance. What should the dividend liability be recorded as for Dutchman's Conestoga as of December 31?

Question

Quizplus · Accepted Answer

The dividend liability should be recorded as R250,000 (100,000 shares x R2.50 per share) as of December 31 because the dividends were declared before the year-end.

Dutchman's Conestoga Is a Large, Publicly Traded Sports Store Headquartered