Austin Corporation was authorized to issue 100,000 shares of $10 par common stock.During 2012 Austin issued 30,000 shares at a market price of $15 per share.On December 1,2012,Austin declared a cash dividend of $2 per share payable on December 30 to stockholders of record as of December 15.
Required:
a)Indicate effect on financial statements on the date of declaration,date of record,and date of payment of the cash dividends.Use the model below. b)What kind of transaction is the declaration of a cash dividend?
c)What kind of transaction is the payment of a cash dividend?

Question

Austin Corporation was authorized to issue 100,000 shares of $10 par common stock.During 2012 Austin issued 30,000 shares at a market price of $15 per share.On December 1,2012,Austin declared a cash dividend of $2 per share payable on December 30 to stockholders of record as of December 15.
Required:
a)Indicate effect on financial statements on the date of declaration,date of record,and date of payment of the cash dividends.Use the model below.  b)What kind of transaction is the declaration of a cash dividend?
c)What kind of transaction is the payment of a cash dividend?

Quizplus · Accepted Answer

The Answer of Austin Corporation was authorized to issue 100,000 shares of $10 par common stock.During 2012 Austin issued 30,000 shares at a market price of $15 per share.On December 1,2012,Austin declared a cash dividend of $2 per share payable on December 30 to stockholders of record as of December 15.
Required:
a)Indicate effect on financial statements on the date of declaration,date of record,and date of payment of the cash dividends.Use the model below.  b)What kind of transaction is the declaration of a cash dividend?
c)What kind of transaction is the payment of a cash dividend?

Austin Corporation Was Authorized to Issue 100,000 Shares of $10