CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 11-3LESSON 11-3

Calculating and Journalizing Dividends for a Corporation

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

Calculating Value of Preferred Stock

DIVIDENDSDIVIDENDS page 328

Number of Preferred Shares

Par Value =Value of

Preferred Stock×

1,000 $100.00 = $100,000.00×

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

DIVIDENDSDIVIDENDS page 328

Calculating Value of Common Stock

Number of Common Shares

Stated Value =Value of

Common Stock×

16,000 $20.00 = $320,000.00×

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

DIVIDENDSDIVIDENDS page 329

Calculating Dividend of Preferred Stock

=×Value of

Preferred StockPreferred

Dividend RatePreferred

Dividend Amount

$100,000.00 8% = $8,000.00×

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

DIVIDENDSDIVIDENDS page 329

Calculating Amount Available for Common Dividends

Total Amount Available for Dividends

Preferred Dividend Amount

=Amount Available

for Common Dividends

–

$24,000.00 $8,000.00 = $16,000.00–

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

DIVIDENDSDIVIDENDS page 329

Calculating Dividend Rate for Common Stock

Common Dividend Amount

Value of Common Stock

=Common Dividend

Rate÷

$16,000.00 $320,000.00 = 5%÷

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

JOURNALIZING DECLARATION OF JOURNALIZING DECLARATION OF DIVIDENDDIVIDEND page 330

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

JOURNALIZING PAYMENT JOURNALIZING PAYMENT OF A DIVIDENDOF A DIVIDEND page 330

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LESSON 11-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

TERMS REVIEWTERMS REVIEW

declaring a dividend date of declaration date of record date of payment

page 332