Answer to Question #108905 in Accounting for michael

Question

(a) Assume that declaration and payment of cash dividends are separate journal entries. Record the journal entry for declaration of total dividends for the year. (No date required)

(b) Assume that on Jan 1, 2019, Samsung issues 10 million new ordinary shares to an investor in exchange for land, which appraisers stated the fair market value as KRW 9 billion. Record the journal entry in KRW millions.



Refer to: Samsung 2018 FS images.samsung.com/is/content/samsung/p5/global/ir/docs/2018_con_quarter04_all.pdf

Answer 1

a) Dividends accrued:

Debit retained earnings Credit Staff calculations

Debit retained earnings Credit Settlements with shareholders

b) Jan 1, 2019:

Reflected increase in share capital due to the issue of shares:

Debit settlements with founders Credit increase in authorized capital - 9000 KRW

Received land from a shareholder as payment for shares of an additional issue:

Debit fixed assets Credit settlements with founders- 9000 KRW