A Company Declared a $0

question 183

Multiple Choice

A company declared a $0.80 per share cash dividend.The company has 100,000 shares authorized,45,000 shares issued,and 42,000 shares of common stock outstanding.What is the journal entry to record the dividend declaration?

• A) Debit Dividends and credit Dividends Payable for $36,000
• B) Debit Dividends and credit Dividends Payable for $33,600
• C) Debit Dividends Payable and credit Cash for $36,000
• D) Debit Dividends Payable and credit Cash for $80,000

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Definitions:

Winding Up

The process of settling the accounts and liquidating the assets of a company for the purpose of distributing the proceeds to claimants and shutting down the company permanently.

Implied Authority

The power of an agent to perform acts that are reasonably necessary to accomplish the purpose of an agency, even if not explicitly authorized.

Dissolution

The process of formally closing or ending an entity, such as a business, partnership, or marriage, through legal means.

Wrongfully Dissociated

In the context of partnership law, this term refers to a partner being expelled or exiting a partnership in violation of the agreement or governing statutes.