X Corporation Had a Net Income of $375,000 in 2011

question 38

Essay

X Corporation had a net income of $375,000 in 2011. The Board of Directors declared a dividend of $0.25 a share on the 150,000 shares outstanding on December 13 to be paid on December 23. Retained earnings on January 01, 2012 were $630,000.
(a) Prepare the journal entries for the declaration of the dividends and for the payment of these dividends.
(b) Prepare the Retained Earnings Statement at the end of 2011.

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Definitions:

General Price Level

An indicator of the average prices of goods and services throughout an economy over a period of time, often used to measure inflation.

Hourly Pay

Compensation or wage calculated based on the number of hours worked, often used for part-time, temporary, or freelance work.

U.S. Dollar Terms

Pricing or valuation of goods, services, or assets denominated in U.S. dollars, irrespective of the local currency.

Real Hourly Compensation

The wages received by an employee adjusted for inflation, reflecting the true purchasing power over time.