On March 1, Year 1, Gilmore Incorporated declared a cash dividend on its 1,500 outstanding shares of $50 par value, 6% preferred stock. The dividend will be paid on May 1, Year 1 to the stockholders of record as of April 1, Year 1. How will the entry to record the dividend on March 1 affect the financial statements?

Question

On March 1, Year 1, Gilmore Incorporated declared a cash dividend on its 1,500 outstanding shares of $50 par value, 6% preferred stock. The dividend will be paid on May 1, Year 1 to the stockholders of record as of April 1, Year 1. How will the entry to record the dividend on March 1 affect the financial statements?
On March 1, Year 1, Gilmore Incorporated declared a cash dividend on its 1,500 outstanding shares of $50 par value, 6% preferred stock. The dividend will be paid on May 1, Year 1 to the stockholders of record as of April 1, Year 1. How will the entry to record the dividend on March 1 affect the financial statements? A) Choice A B) Choice B C) Choice C D) Choice D

Quizplus · Accepted Answer

The declaration will increase liabilities (dividends payable) and decrease equity (increase dividends).

On March 1, Year 1, Gilmore Incorporated Declared a Cash