To appropriately depreciate these assets, the company would depreciate the net of the cost and salvage value over the useful life of the assets. If the assets have a useful life of seven years, the company would depreciate the assets by $30,000 each year. Companies…
Read moreThe declaration date is the date on which the board of directors declares the dividend. A business in the process of growing may need the cash to fund expansion, and might be better served by retaining the profits and using the internally generated cash rather…
Read moreIt is the date that the company commits to the legal obligation of paying dividend. Hence, the company needs to make a proper journal entry for the declared dividend on this date. Assuming there is no preferred stock issued, a business does not have to pay dividends,…
Read moreThe total dividends payable liability is now 80,000, and the journal to record the declaration of dividend and the dividends payable would be as follows. Therefore, the dividends payable account – a current liability line item on the balance sheet – is recorded…
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