The board of directors of Enerson Manufacturing is in the process of declaring a dividend. The company

Question:

The board of directors of Enerson Manufacturing is in the process of declaring a dividend. The company is considering paying a cash dividend of $12 per share. Enerson Manufacturing is authorized to issue 800,000 shares of common stock. The company has issued 375,000 shares to date and has reacquired 50,000 shares.

These 50,000 shares are held in treasury.

a. How many shares of common stock are eligible to receive a dividend?

b. Assume that the board declares the dividend. Prepare the appropriate journal entries on the

(1) Date of declaration,

(2) Date of record,

(3) Date of payment.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... 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...