Use the Following Information for Questions

question 34

Multiple Choice

Use the following information for questions
On July 15, 2015, the board of directors of George Easton Limited declared a cash dividend of $0.50 per share on 84,000 common shares.The dividend is to be paid on August 15, 2015, to shareholders of record on July 31, 2015.
-The journal entry to be recorded on July 15, 2015, will include a

• A)debit to Dividends Payable.
• B)debit to Cash Dividends.
• C)credit to Cash.
• D)credit to Retained Earnings.

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Definitions:

Retained Earnings Statement

A financial statement that summarizes the changes in retained earnings for a specific period.

Income Statement

A financial statement that provides a summary of a company’s revenues, expenses, and profits/losses over a specified period.

Stock Dividends Distributable

Shares to be issued to shareholders as part of a stock dividend, representing a portion of earnings not paid out as cash dividends.

Current Liabilities

Obligations or debts that a company must pay within a year from the date of the balance sheet.