quilt1950

Well, this makes me think the dividends were declared but not paid. There would be no change to cash. So, I 'think' the amount you want to enter is 0.00. Does your statement 'work' if you enter 0.00?

MTS

OK.
And I'm still saying that the Cash Dividends DECLARED entries net to ZERO, with no effect on actual cash balances.

If the board declared a dividend on Dec 31st 2013 that will be payable on Jan 15th 2014, it's got nada effect on cash flow for 2013.

The PAYMENT of a cash dividend, however, will, obviously, be reflected on a Statement of Cash Flow. In 2014.

sharon b

I think it is just thrown out there to confuse you- since it is only DECLARED and NOT paid it has no effect on the cash

QuiltnNan

wow, this is all very confusing to me :)

Lneal

So declared dividends are not paid?That helps to know.

0tis

I also despised Statements of Cash Flows - they were the most difficult of statements for me during my Accounting days. I preferred income tax returns....

MTS

I'm sure if you look in your textbook, there will be a more detailed explanation of the process.

In a rinky-dink (no offense intended) small business, the owner can declare a dividend or payout and cut the check the same day.

Doesn't work that way in real life in a Fortune 100 corporation (or any publicly traded company).

For instance:
the board declares the dividend on 12/20/11
for shareholders of record on 12/31/11
payable on 01/07/12

The Ex-Dividend date would 12/29/11.
This means if you buy the stock after this date, you won't get the dividend.
If you sell after this date, say on 12/30/11, but before the date of record, you'd still get the dividend.
The ExDiv date is always 2(?) days prior to the record date.

(btw, there are many, many funds and investors that play this game. Yeah, the tax rate is higher if they're buying and selling without holding the stock for such a short time, but sometimes it's worth it.)

Dividend checks will be mailed on 1/7/12.
The corp. needs time after the date of record to make sure all accounts are settled so it knows who owns how many shares of its stock that will eligible for a dividend payment.

Effect on cash flow for 2011 - zip.

Lneal

Thanks for all your help!!

I did it!! My accounting problem came out right!! The declared dividend had me confused but now I understand.

Barb44

I haven't thought about this stuff for 11 years. I'm a bookkeeper now and have asked our CPA for a cash flow statement but they won't do it. They don't like them either. We need a different CPA. I might be able to do one if I tried, but it would take some brushup.

But the important thing is that you only consider actual cash coming in and going out.

MTS

I'm glad.:thumbup:
I just realized you're same person who asked the Excel questions. ;-)