LEC-Equity 2.pdf - JARD-REF3-L-EQUITY2 ACCOUNTING FOR...

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JARD-REF3-L-EQUITY2 -ADAMSON UNIVERSITY- Page 1 of 1 ACCOUNTING FOR SHAREHOLDERS’ EQUITY RETAINED EARNINGS Represents the firm’s accumulated net income or net loss, including prior-period adjustments less the dividends declared and other amounts transferred to the contributed capital accounts. DIVIDENDS Distribution of corporate income to its shareholders on a pro rata basis. Dividends are distributed out of accumulated earnings of the corporation, except for a liquidating dividend which represents a return to the shareholders of their investment. Dividend may take the form of: Cash Non-cash assets (use fair value of property; if not, use fair value of shares) Corporate indebtedness (scrip dividends) Corporation’s own share capital If small issue (less than 20%), use the fair value of shares If big issue (20% or more), use the par value of shares Date of Declaration Retained Earnings xx Account xx Date of Record -no entry- Date of Payment
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