National Chocolate Corp produces chocolate bars and snacks u

National Chocolate Corp. produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information: March 5-National Chocolate Corp. today announced that its Board of Directors has declared a special one-time cash dividend of $1.20 per share on its 96,000 outstanding common shares. The dividend will be paid on April 29 to shareholders of record at the close of business on March 26. The Company\'s fiscal year will end April 30 Required 1. Prepare any journal entries that National Chocolate Corp should make on the four dates mentioned in press release. (If no entry is required for a transaction/date, select \"No Journal Entry Required\" in the first account field.) View transaction list Journal entry worksheet Record the declaration of a cash dividend of $1.20 per share payable on the 96,000 shares of common stock outstanding. Note: Enter debits before credits Date March 05 General Journal Debit Credit Record entry Clear entry View general journal 2. Wnat would the board of dreaors have considered bolore making the dvidend decisions O The board must consider the balances of common stock and cash before declaring a cash dividend O The board must consider he balances of retained earnings and cash before declaring a cash dividend

Solution

1 Journal entries in the books of National Chocolate Corp Date General Journal Debit Credit Mar-05 Retained Earnings (96000*$1.20) 115200 Dividend Payable 115200 (Declared dividend on 96000 shares @ $1.20 per share) Mar-26 No journal entry is required on the date of record Apr-29 Dividend Payable 115200 Cash 115200 (Paid dividend on 96000 shares @ $1.20 per share declared on Mar - 05) Apr-30 No entry Is done on accounts closure 2 The board should consider balance of retained earnings and cash before declaring a cash dividend