A Corporation Declares a Dividend of $0

question 89

Multiple Choice

A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock. Which of the following would be included in the entry to record the declaration?

• A)Retained Earnings would be debited for $5,000.
• B)Paid-In Capital in Excess of Par-Common would be credited for $5,000.
• C)Retained Earnings would be credited for $5,000.
• D)Dividends Payable-Common would be debited for $5,000.

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Definitions:

Net Income

After accounting for all costs and paying taxes, the remaining revenue that constitutes a company's profit.

Marginal Tax Rates

The rate at which your last dollar of income is taxed, representing the percentage of tax applied to your income for each tax bracket in which you qualify.

Eligible Dividends

Dividends designated by a corporation to be eligible for a reduced tax rate in the hands of individual Canadian shareholders.

Interest Income

Income earned from deposit accounts or investments through the receipt of interest payments.