Chapter 6
Corporations: Contributed Capital and Dividends
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The following transaction was incurred by Ping Pong Inc. during the year ended December
31, 2016.
Jun 4 Issued 100,000 common shares for $15 per share.
For the year ended December 31, 2016, the company had a net income of $1,540,000. At the
board of directors’meeting held on January 15, 2017, the company decided to pay out 25%
of net income as cash dividends to preferred and common shareholders. The date of record of
dividend is January 31, 2017.
The dividend is to be paid on February 28, 2017.
During the period January 1–February 28, 2017, the company had a net income of $250,000.
Required
a) Prepare journal entries to record the above transactions.
Date
Account Title and Explanation
Debit
Credit
