Paying Out a corporate dividend - how?

Posted By Golden Barstewart over 16 years ago

Hello all,

I have small small business corporation and want to pay out a dividend to shareholders. How do I do that in Simply Accounting (my version is 2007)?

What I did was set up a group account 3525 in the Retained Earnings section, then issued a cheque to the shareholder as a vendor, thereby crediting the bank account and debiting the account 3525. This results in the total retained earnings increasing by the amount of the dividend. Is this correct???

Your help would be appreciated!

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Brent Corner over 16 years ago

You should take a look at the entry and the results again because when you enter the dividend, it will be a debit againt the total shareholder equity in the corporation. In other words there will now be less equity in the corporation and thus the equtiy will be lower.

Example

Retained Earnings 10,000 - a credit balance

Dividend -5,000 - a debit

Current Earnings 13,000 a credit balance

Total Retained Earnings 18,000 - a credit balance
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Brent Corner over 16 years ago

You should take a look at the entry and the results again because when you enter the dividend, it will be a debit againt the total shareholder equity in the corporation. In other words there will now be less equity in the corporation and thus the equtiy will be lower.

Example

Retained Earnings 10,000 - a credit balance

Dividend -5,000 - a debit

Current Earnings 13,000 a credit balance

Total Retained Earnings 18,000 - a credit balance
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Vote Up 0 Vote Down

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Paying Out a corporate dividend - how?

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