6.1 ACIS211_Week_6_Lecture_1

final dividends paid retained earn ings oe interim

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Dividends Dr Cr Dr Cr Dr Cr Cr Interim Dividends (-ve OE) Bank (A) ( Interim Dividends Paid) Final Dividends (-ve OE) Bank (A) ( Final Dividends Paid) Retained Earn ings (OE) Interim Dividends (OE) Final Dividends (OE) ( Closing Entry – Dividends) Closing Entry Accounting Treatment for Accounting Treatment for Dividend Distributions (Cont) Where a final dividend is announced before the balance date, the dividend becomes a liability, therefore Dr Final Dividends (OE) Cr Dividends Payable (L) Generally the dividend is announced post balance date, disclosed in the notes to the financial statements and paid in the new period Share Splits Share Splits ‘Split’ the number of current shares Retain the total amount of equity Reduce the average share ‘value’ Often done to increase marketability of shares Sometimes done to facilitate change in ownership percentages Bonus Issues Bonus Issues Bonus issues are share issues made as a non­cash distribution (therefore no solvency test) Normally used to indicate future earning potential Accounting for Bonus Accounting for Bonus Issues When bonus issue made from general equity no entry required Generally bonus issue made from reserves therefore Dr Reserves Cr Contributed Capital Dividend Electio...
View Full Document

This note was uploaded on 12/23/2009 for the course BCOM ACIS 211 taught by Professor Susanwild during the Spring '09 term at Canterbury.

Ask a homework question - tutors are online