On November 1, 2014, Oster Company Declared a Dividend of $3.00

question 161

Multiple Choice

On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. Which of the following is the journal entry needed to record the declaration of dividends?

• A) Debit Dividends payable $60,000 and credit Retained earnings $60,000.
• B) Debit Retained earnings $60,000 and credit Cash $60,000.
• C) Debit Retained earnings $60,000 and credit Dividends payable $60,000.
• D) Debit Cash $60,000 and credit Dividends payable $60,000.

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Definitions:

Export Supply Curve

A graphical representation showing the relationship between the price of a good on the international market and the quantity that domestic producers are willing to export.

Import Demand Curve

A graph showing the relationship between the price of an imported good and the quantity of the good that consumers in the importing country are willing to buy.

Equilibrium World Price

The price at which the supply of a good on a global scale exactly matches the world demand for that good.

Production Possibilities Curve

A graphical representation that shows the maximum quantity of two goods that can be produced within a given resource constraint.