Dividends

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Dividends


Lecture number:
11
Pages:
2
Type:
Lecture Note
School:
Miami University, Oxford
Course:
Acc 221 - Intro to Financial Accounting
Edition:
1
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Lecture 11 Outline of Previous Lecture  Chapters 7 & 8: Additional Adjusting Entries  Accrued Liabilities o Recording entries even if you have not paid  Unearned Revenue Accounts o Someone pays us in advanced for work o Additional Applications  Accrued Assets o People have not paid us for services completed Outline of Current Lecture  Chapter 10: Dividends  What can you do with your money? o Options o Dividends o Dividends Process o Retained Earnings Current Lecture  Chapter 10: Dividends  What can you do with your money? o Options  Take out savings through bank to gain interest  Reinvest in company to get additional equipment, inventory or supplies  Redistribute money back to owners o Dividends – redistributing money back to owners through cash payments  Cash account – see if we can afford to pay for dividends  Cannot only look in retained earnings, because we may not have the cash if reinvested into company through equipment, supplies, or inventory  Retained earnings – what we are paying the money out of o Dividends process  Day of declaration  Go to board of directors, they decide whether we have enough funds/ when we are able to make a dividends payment  If they agree, make an announcement within the market that they will be making a dividends payment to all stockholders o Once announced, company has a legal obligation to pay dividends  Entry on day of declaration ACC 221 1st Edition



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