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matthew_dc
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Joined: 13 Mar 2009
Location: United States
Online Status: Offline
Posts: 71

Posted: 15 Sep 2009 at 23:09 \| IP Logged

Any help with this would be appreciated:

A company declares a property dividend. The BV of the asset to be distributed is $600K. The FV is $720K. I'd like to find out the JE input to record this. I'm guessing.

CR Asset <600,000>
DR RE 720,000*
CR PL Gain <120,000>*

* Though maybe the gain doesn't go to the PL in the period of the dividend? If not, where? To RE also?

Apart from the above, I'm curious how the company gets a current liability for the dividend payable on the books. Or is that not necessary? I was thinking at y/e there should be a Property Dividend payable for <720,000>, and if so, what the DR is for that JE. Thanks for any help.

-----------------------------

I found the answer here:

< http-equiv="Content-" content="text/; charset=utf-8">< name="ProgId" content="Word.">< name="Generator" content="Microsoft Word 12">< name="Originator" content="Microsoft Word 12">

www3.interscience.wiley.com:8100/legacy/college/kieso/.../ch 12.ppt -

---AT DECLARATION:

DR ASSET $120,000
CR PL GAIN <$120,000>

DR RE $720,000
CR DIVIDEND PAYABLE <$720,000>

---AT PAYMENT:

CR ASSET <$720,000>
DR DIVIDEND PAYABLE $720,000

bird
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Joined: 22 Aug 2009
Location: United States
Online Status: Offline
Posts: 208

Posted: 16 Sep 2009 at 08:01 \| IP Logged

1. Recognize Gain on disctribution of property dividend:

Dr: Asset $120,000

Cr: Gain &n bsp; $120,000

2. Declare Dividend

Dr: Dividends $720,000

Cr: Dividends Payable $720,000

3. Pay Dividend

Dr: Dividend Payable $720,000

Cr: Asset &nbs p; &nbs p; $720,000

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