Who Knows Accounting?
#11
Super Member
Join Date: Dec 2010
Posts: 1,232
Originally Posted by Lneal
The problem says ; An examination of the income statement and the accounting records revealed the following additional information applicable to 2013:
On the statement of cash flows indirect method these numbers are entered for the liabilities and stockholders equity. Dec 31, 2013 $28,080 .......... Dec 31 2012 $21,600
Then I am given Cash dividends declared, $112,320 as the additional information.When doing my cash flows from financial activities I don't know how to enter the amount for less cash paid for dividends.
I hope I am making sense and sorry if I am not. This is so new to me.
On the statement of cash flows indirect method these numbers are entered for the liabilities and stockholders equity. Dec 31, 2013 $28,080 .......... Dec 31 2012 $21,600
Then I am given Cash dividends declared, $112,320 as the additional information.When doing my cash flows from financial activities I don't know how to enter the amount for less cash paid for dividends.
I hope I am making sense and sorry if I am not. This is so new to me.
#12
Banned
Join Date: Nov 2010
Posts: 4,134
Originally Posted by Lneal
On the statement of cash flows indirect method these numbers are entered for the liabilities and stockholders equity.
Dec 31, 2013 $28,080 ..........
Dec 31 2012 $21,600
Then I am given Cash dividends declared, $112,320 as the additional information.
Dec 31, 2013 $28,080 ..........
Dec 31 2012 $21,600
Then I am given Cash dividends declared, $112,320 as the additional information.
And I'm still saying that the Cash Dividends DECLARED entries net to ZERO, with no effect on actual cash balances.
If the board declared a dividend on Dec 31st 2013 that will be payable on Jan 15th 2014, it's got nada effect on cash flow for 2013.
The PAYMENT of a cash dividend, however, will, obviously, be reflected on a Statement of Cash Flow. In 2014.
#17
Banned
Join Date: Nov 2010
Posts: 4,134
Originally Posted by Lneal
So declared dividends are not paid?That helps to know.
In a rinky-dink (no offense intended) small business, the owner can declare a dividend or payout and cut the check the same day.
Doesn't work that way in real life in a Fortune 100 corporation (or any publicly traded company).
For instance:
the board declares the dividend on 12/20/11
for shareholders of record on 12/31/11
payable on 01/07/12
The Ex-Dividend date would 12/29/11.
This means if you buy the stock after this date, you won't get the dividend.
If you sell after this date, say on 12/30/11, but before the date of record, you'd still get the dividend.
The ExDiv date is always 2(?) days prior to the record date.
(btw, there are many, many funds and investors that play this game. Yeah, the tax rate is higher if they're buying and selling without holding the stock for such a short time, but sometimes it's worth it.)
Dividend checks will be mailed on 1/7/12.
The corp. needs time after the date of record to make sure all accounts are settled so it knows who owns how many shares of its stock that will eligible for a dividend payment.
Effect on cash flow for 2011 - zip.
#19
Senior Member
Join Date: Apr 2011
Location: South Dakota
Posts: 662
I haven't thought about this stuff for 11 years. I'm a bookkeeper now and have asked our CPA for a cash flow statement but they won't do it. They don't like them either. We need a different CPA. I might be able to do one if I tried, but it would take some brushup.
But the important thing is that you only consider actual cash coming in and going out.
But the important thing is that you only consider actual cash coming in and going out.
#20
Banned
Join Date: Nov 2010
Posts: 4,134
Originally Posted by Lneal
Thanks for all your help!!
I did it!! My accounting problem came out right!! The declared dividend had me confused but now I understand.
I did it!! My accounting problem came out right!! The declared dividend had me confused but now I understand.
I just realized you're same person who asked the Excel questions. ;-)
Thread
Thread Starter
Forum
Replies
Last Post
auntpiggylpn
General Chit-Chat (non-quilting talk)
30
08-05-2012 09:43 PM
blzzrdqueen
General Chit-Chat (non-quilting talk)
21
10-22-2010 06:53 AM
Chasing Hawk
General Chit-Chat (non-quilting talk)
7
03-05-2010 07:47 PM