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What effect will the declaration and distribution of a stock dividend have on the net income and cash flows?
Wiki User
∙ 11y ago
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 flows
No effect on net income, decrease cash flows
Decrease net income, decrease cash flows
Increase net income, no effect on cash flows
Wiki User
∙ 11y ago
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When do you recognize dividend as income?
on declaration date
What is the journal of Dividend Income?
If dividend income received: Debit Cash / bank Credit Dividend income If dividend income receivable: Debit Dividend income receivable Credit Dividend income
What is the income you earn from the shares dividend?
Income earned from shares is called dividend income and shown in income statement as "Other income".
What is the tax treatment of a dividend to the company?
dividend paid by the company is exempt from tax u/s 115O, but dividend distribution tax should be paid by the company as per Income tax Act before dividend.According to the union budget 2007, the rate is 15%. Equity mutual funds (with more than 65% of assets invested in equities) do not pay a dividend distribution tax, though other funds do. Liquid and Money Market funds pay 25% dividend distribution tax.
How to calculate net income when cash dividend is given?
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.
When do you recognize dividend as income?
on declaration date
What is dividend distribution tax?
Dividend distribution tax is the tax levied by the Indian Government on companies according to the dividend paid to a company's investors. As per existing tax provisions, income from dividends is tax free in the hands of the investor. There is a levy of 15% of the dividend declared as distribution tax. This tax is paid out of the profits/reserves of the company declaring the dividend.  The provisions of this Section applies to a domestic company for any assessment year, on an amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise)  The Company is required to pay the Dividend Distribution Tax within 14 days from the date of declaration or distribution or payment of any dividend whichever is earlier.  The said dividend distribution tax is in addition to the income tax chargeable on the total income of the Company and the same shall be payable @15% and the same shall be increased by Surcharge @10%, and such aggregate of tax and surcharge shall be further increased by an Education cess @2% and higher education cess 1% .  The Section applies to dividend payments made either out of current or accumulated profits.  The dividend so paid will be eligible for exemption for the shareholders under Section 10(34).  The Dividend Distribution Tax is payable by a Domestic Company even if no income-tax is payable on its total income.
What is dividends tax?
Dividend distribution tax is the tax levied by the Indian Government on companies according to the dividend paid to a company's investors. As per existing tax provisions, income from dividends is tax free in the hands of the investor. There is a levy of 15% of the dividend declared as distribution tax. This tax is paid out of the profits/reserves of the company declaring the dividend.  The provisions of this Section applies to a domestic company for any assessment year, on an amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise)  The Company is required to pay the Dividend Distribution Tax within 14 days from the date of declaration or distribution or payment of any dividend whichever is earlier.  The said dividend distribution tax is in addition to the income tax chargeable on the total income of the Company and the same shall be payable @15% and the same shall be increased by Surcharge @10%, and such aggregate of tax and surcharge shall be further increased by an Education cess @2% and higher education cess 1% .  The Section applies to dividend payments made either out of current or accumulated profits.  The dividend so paid will be eligible for exemption for the shareholders under Section 10(34).  The Dividend Distribution Tax is payable by a Domestic Company even if no income-tax is payable on its total income.
What is the journal of Dividend Income?
If dividend income received: Debit Cash / bank Credit Dividend income If dividend income receivable: Debit Dividend income receivable Credit Dividend income
How do you record declared cash dividend on an income statement?
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.
What is the income you earn from the shares dividend?
Income earned from shares is called dividend income and shown in income statement as "Other income".
What is the tax treatment of a dividend to the company?
dividend paid by the company is exempt from tax u/s 115O, but dividend distribution tax should be paid by the company as per Income tax Act before dividend.According to the union budget 2007, the rate is 15%. Equity mutual funds (with more than 65% of assets invested in equities) do not pay a dividend distribution tax, though other funds do. Liquid and Money Market funds pay 25% dividend distribution tax.
Does net income on balance sheet come from income statement?
Yes income in balance sheet is the same amount which is calculated in income statement if there is any difference then it may be due to distribution of net income between retained earnings and dividend.
How do you recognised the dividend income?
[Debit] Cash/Bank xxxx [Credit]Dividend Income xxxx
What is the symbol for Dividend and Income Fund in the NYSE?
The symbol for Dividend and Income Fund in the NYSE is: DNI.
What is a dividend factor?
Dividend factor = Net earned income / dividend earning shares
How does dividends affect net income?
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.
