Black & Decker is a leading global manufacturer and marketer of power tools, hardware, and home improvement

Question:

Black & Decker is a leading global manufacturer and marketer of power tools, hardware, and home improvement products. A press release on April 30, 2009, contained the following announcement:
The Black & Decker (NYSE: BDK) announced that its board of directors declared a quarterly cash of $0.12 per share of the Corporation's outstanding payable June 26, 2009, to stockholders of record at the close of business on June 12, 2009. This represents a reduction from the $0.42 quarterly paid by the since 2007. Nolan D. Archibald, Chairman and Chief Executive Officer, commented, "In today's uncertain and challenging economic environment, however, we believe it is important to preserve liquidity. By lowering the to $0.12 per quarter, we will reduce cash outflows by $54 million in 2009. This action will strengthen our balance sheet, improve our credit metrics and provide greater financial flexibility." At the time of the press release, Black & Decker had 150,000,000 shares authorized and 60 million outstanding. The for the company's stock is $.50 per share.
Required:
1. Prepare journal entries as appropriate for each of the three dates mentioned above.
2. Explain how a cut from $0.42 to $0.12 will strengthen the company's balance sheet?
Common Stock
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A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...