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6 February, 15:18

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 24,000 shares authorized, 11,400 shares issued, and 9,600 shares of common stock outstanding. The journal entry to record the dividend declaration is:

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  1. 6 February, 17:36
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    Data provided

    Number of shares outstanding = 9,600

    Cash dividend per share = $0.50

    The Journal entry is shown below:-

    Retained earning Dr, $4,800

    To Common dividends payable $4,800

    (Being dividend declaration is recorded)

    Working note:-

    Retained earning = Number of shares outstanding * Cash dividend per share

    = 9,600 * $0.50

    = $4,800
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