10/13/2020 Selected transactions completed by Equinox Products Inc.

Products Inc. during the fiscal year ended December 31, 20Y8, were as follows: a. Iss…

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Chapter 12, Problem 1COMP

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shareholders is referred as declaration date.

Cash Dividends is a temporary stockholders’ equity account. The account is debited as the cash dividends are declared and eventually
be transferred to Retained Earnings account. Therefore, Cash Dividends account is debited
Cash Dividends Payable is a liability account and the amount owed to the stockholders is increased. Therefore, Cash Dividends
Payable account is credited.

e.

Record the payment of cash dividend declared in (d).

Record the journal entry for the payment of cash dividends.

Date Account Titles and Explanation Post Ref. Debit ($) Credit ($)

    Cash Dividends Payable   70,000

               Cash ($20,000 + $50,000)   70,000

(To record payment of dividends)

Table (6)

Payment date: The date on which the company makes payments to its shareholders for the declared cash dividends is referred as payment
date.

Dividends Payable is a liability account and the amount is decreased because the dividends owed are paid off

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(2) a.

To determine

Prepare a multiple-step income statement for the year ended December 31, 20Y8.

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(2) b.

To determine

Prepare a statement of stockholders’ equity for the year ended December 31, 20Y8.

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(2) c.

To determine

Prepare a balance sheet report form as of December 31, 20Y8.

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