usual type of dividend paid to stockholders. It is typically expressed on a dollar-and-cents-per-share basis. However, with preferred stock, the dividend is expressed as a percentage of par value. Dividends are paid on outstanding shares. Assume on 11/15/2005, a cash dividend of $1.50 per common share is declared. Issued shares are 12,000 and treasury shares are 2000. The record date is 12/20/2005. Payment is to be made on 1/15/2006. The entry on 11/15/2005 is to debit retained earnings and credit cash dividends payable for $15,000 (10,000 shares ¥ $1.50). Cash dividends payable is a current liability. No entry is made on the record date. On 1/15/2006, cash dividends payable is debited and cash credited for $15,000. Assume there are 30,000 shares of $10 par value, 8% preferred stock.
cash payment to a corporation's stockholders, distributed from current earnings or accumulated profits and taxable as income. Cash dividends are distinguished from stock dividends, which are payments in the form of stock.
cash payment to a corporation's shareholders, distributed from current earnings or accumulated profits and taxable as income. Cash dividends are distinguished from stock dividends, which are payments in the form of stock.
investment company cash dividends are usually made up of dividends, interest income, and capital gains received on its investment portfolio.
