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    KimberJune's Avatar
    KimberJune Posts: 6, Reputation: 1
    New Member
    		  
    #1

    Oct 2, 2009, 06:23 PM
    Dividend payments and declared dividends?
    In preparing my income statement I was given this piece of additional information:

    During 2008, the person recorded dividend payment of $260 000 to a major shareholder for consulting work. A dividend was also declared on Dec 31, 2008 in the amount of $120000.

    How will I incorporate this information in the income statement or statement of retained earnings.
    Will I put the amount declared in the statement of retained earnings?

    If it helps Common shares, 430 000 shares outstanding
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #2

    Oct 2, 2009, 09:15 PM

    This appears to be homework question. Please submit your attempt for guidance.

    It is rather strange to find that payment to a shareholder for consultancy is treated as dividend payment. Does not make sense.
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