EXERCIS

E:
On July 11, 2020, Tulod Company declared a
P2/share dividend to its common stockholders as
of August 1, 2020. The dividends are to be paid
on October 30 of the same year.
ANSWERS:

Date of Declaration- July 11, 2020

Date of Record- August 1, 2020

Date of Payment- October 30.

EXERCISE: Additional Assumption

There are 200, 000 authorized ordinary shares.

150, 000 of which are issued and 20, 000 are held
in the treasury.

How much is the total amount of dividends and in

which dividend date should this amount appear in
the company’s journal?
 ANSWERS:
Shares entitled to dividends:
Authorized Shares
200,000

Unissued Shares Issued Shares

50,000 150,000

Treasury Shares Outstanding Shares

20,000 130,000
130, 000 x 2 = P260, 000
 EXERCISE:
What should be the entry on July 11, August 1
and October 30?

July 11 Retained Earnings P 260, 000

Dividends Payable P 260, 000
August 1 NO ENTRY
Oct 30 Dividends Payable P 260, 000
Cash P 260, 000
EXERCISE: Additional Assumption

If Estipular, a new investor, bought 5, 000 shares on

July 29, will she be entitled to receive a dividend?

Yes. It is a dividend-on.