All categories

2 years ago

What are the effects on the accounting equation when dividends are declared and paid?

Business

1 answer:

alexandr1967 [171]2 years ago

3 0

When dividends are declared and paid, retained earnings and cash are both decreased.

Paying dividends reduces cash flow while increasing dividends. A decline in retained earnings will occur when the temporary account of dividends, which will be closed at the end of the time period (such as a year), is closed.

How Do Retained Earnings Work?

After deducting dividend payments, a company's cumulative net earnings or profits are known as retained earnings. The term "retained," which is significant in accounting, captures the fact that the corporation kept such earnings rather than paying them as dividends to shareholders.

For this reason, retained earnings increase when new profits are made and drop when a corporation either makes a profit or pays dividends.

To know more about retained earnings

brainly.com/question/25998979

#SPJ4

You might be interested in

On March 15, 2015, Viking Office Supply agrees to accept $1,200 in cash along with a $2,800, 60-day, 15 percent note from R. Roy

ira [324]

Answer:

The Journal entry with their narrations is shown below:-

Explanation:

The Journal entry is shown below:-

Cash Dr, $1,200

Notes Receivable Dr, $2,800

To Accounts Receivable -R. Roy $4,000

(Being office supply of Vikram is recorded)

Therefore for recording the office supply we simply debited cash and notes receivable and credited the accounts receivable

5 0

3 years ago

A firm that has the ability to control to some degree the price of the product it sells

Llana [10]

I believe the answer is Monopolist.

8 0

3 years ago

Exercise 18-12 Computing sales to achieve target income LO C2 Blanchard Company manufactures a single product that sells for $31

photoshop1234 [79]

Answer:

The unit sales to earn the target income is 9,000 units

Explanation:

Annual income=Total sales-total expenses

where;

Annual income=$1,550,000

Total sales=Cost per unit sales×number of units sold (n)=(310×n)=310 n

Total expenses=Variable cost+annual fixed cost

Total expenses=(248×n)+992,000

Total expenses=248 n+992,000

Replacing;

1,550,000=310 n-(248 n+992,000)

1,550,000=310 n-248 n-992,000

310 n-248 n=1,550,000-992,000

62 n=558,000

n=558,000/62

n=$9,000

The unit sales to earn the target income is 9,000 units

3 0

3 years ago

On January 1, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 20

Step2247 [10]

Answer and Explanation:

The Journal entries are shown below:-

1. Right of use assets Dr, $371,049

To Lease payable $371,049

(Being lease is recorded)

Working note:-

Present value of periodic lease payment $354,595

($100,000 × (present value of ordinary annuity of $1, n = 4, i = 5%)

($100,000 × 3.54595)

Present value of an estimated cash payment under a residual value

$16,454 (Present value $1, n = 4, i = 5%)

Lease payment = $354,595 + $16,454

= $371,049

2. Amortization expense Dr, ($371,049 ÷ 4 years) $97,262

To Right of use assets $97,262

(Being related to the lease is recorded)

3. Interest expense Dr, (5% × $371,049) $18,552

Lease payable Dr, $81,448

To annual payment of cash $100,000

(Being annual payment of lease is recorded)

3 0

3 years ago

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied;

iVinArrow [24]

Answer:

supply curve to the right.

Explanation:

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the supply curve to the right. Drought refers to a period characterized by little or no rainfall in a geographical location over a specific period of time. When there's a drought, the production of agricultural products will be very much affected, thereby causing a decrease in the quantity of farm products.

On the other hand, a good weather would cause an increase in the quantity of farm products and as a result of this, the supply curve would shift rightward because there's enough product to meet the customer's demands or needs.

4 0

3 years ago