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:

Contribution Format

A financial reporting format that focuses on distinguishing between fixed and variable costs and calculating the contribution margin.

Common Fixed Expenses

Overhead costs shared by multiple business units or product lines, which are not attributable to any single unit or product.

Break-even

The point at which total revenues equal total expenses, resulting in no net loss or gain.

Sales Dollars

The total revenue generated from the sale of goods or services, measured in monetary terms.