Cash dividend paid has nothing to deal with net income as net income is calculated first and after that it is distributed.
If cash dividend is received then it is included in net income calculations and increases the net income.
If dividend income received: Debit Cash / bank Credit Dividend income If dividend income receivable: Debit Dividend income receivable Credit Dividend income
Dividend receivable Debit Cash dividend Credit Cash Debit Dividend receivable Credit
19. What effect will the declaration and distribution of a stock dividend have on net income and cash flows? (Points : 2)No effect on net income or cash flowsNo effect on net income, decrease cash flowsDecrease net income, decrease cash flowsIncrease net income, no effect on cash flows
other income and they are found in the income statement
A declared cash dividend is recorded by debiting the dividend account and crediting the dividend payable account.
If dividend income received: Debit Cash / bank Credit Dividend income If dividend income receivable: Debit Dividend income receivable Credit Dividend income
[Debit] Cash/Bank xxxx [Credit]Dividend Income xxxx
Dividend receivable Debit Cash dividend Credit Cash Debit Dividend receivable Credit
19. What effect will the declaration and distribution of a stock dividend have on net income and cash flows? (Points : 2)No effect on net income or cash flowsNo effect on net income, decrease cash flowsDecrease net income, decrease cash flowsIncrease net income, no effect on cash flows
other income and they are found in the income statement
[Debit] Cash 1450 [Credit] dividend income 1450
Answer:Dividends are a distribution of net income. That means dividends is not included in the calculation of net income. Dividend payments do affect net income indirectly. If a company pays a dividend, cash is reduced. This cash can no longer be used to generate profits. That is why 'cash cow' companies pay out the bulk of their profits as dividends (few or no new investment opportunities available) and growth firms retain all profits.
To calculate the dividend paid in a cash flow statement, you would look at the "financing activities" section and find the line item that represents dividends paid to shareholders. This amount represents the cash paid out to shareholders as dividends during the specified period.
To calculate the amount of cash dividends paid by a company, multiply the dividend per share by the total number of shares outstanding.
Dividend isn't an expense or a loss. It is distribution of previous year earning. It isn't part of the computation of net income. So that it is not presented in Income Statement, but Retained Earnings & Stockholder's Equity. CMIIW.
A declared cash dividend is recorded by debiting the dividend account and crediting the dividend payable account.
dividend will affect the cash flow when actual cash is paid and not at the time of declaration of dividend.