This exercise continues our accounting for Sensations Salon, Inc., from Chapter 9. In this exercise, we account

Question:

This exercise continues our accounting for Sensations Salon, Inc., from Chapter 9. In this exercise, we account for the declaration and issuance of a cash dividend by Sensations Salon, Inc. On November 5, 2018, Sensations Salon, Inc., declared a $5,000 cash dividend. The dividend was payable to all common shareholders of record on November 30 and was paid on December 10, 2018.

Requirements

1. Journalize the entries related to the dividends.

2. What was the effect of the dividend on the following?

a. Cash

b. Retained Earnings

c. Total Stockholders’ Equity

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...

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