DFS - proposed dividends effect on cash flow statement HELP!

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:26AM in AAT student discussion
Hi all

Just wondering if proposed dividends had an effect on cash flow. I have been given the following information:

Bal Sheet:
20x1
Proposed dividends 18k

20X2
Proposed dividends 16k

P/L:
20X2
Dividends 22k


Is the paid dividends the 22k or do I need to add on th 18k from 20X1 or what?! Quite confused!

:idea: :-o

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - proposed dividends effect on cash flow statement HELP!

    Only paid dividends will effect your cashflow.

    Proposed didvidends are only included for information purposes,
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - proposed dividends effect on cash flow statement HELP!

    So what dividends have been paid in this case?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - proposed dividends effect on cash flow statement HELP!

    Sorry misread that.

    The proposed dividends need to be included in the P&L and then as a creditor on the balance sheet.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - proposed dividends effect on cash flow statement HELP!

    Yes, but what do we show on a cash flow as the amount that has been paid within 20x2 as an outflow?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - proposed dividends effect on cash flow statement HELP!

    from them information that you have provided it looks like the an iterim dividend was paid of 6K total. The 18k would have appeared on the P&L and balance sheet for 20X1 and then been cancelled out when they were actually paid.

    The proposed dividend of 16k would be the same which then leaves 6k which you haven't provided the information for. unless the actual amount paid for 20X1 was 24k instead of 18k.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - proposed dividends effect on cash flow statement HELP!

    The cash that has actually gone out in 20x2 is the 18k from the proposed 20x1 dividend and then possibly the extra 6k if it was paid as an interim dividend.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS - proposed dividends effect on cash flow statement HELP!

    That sounds good to me. Now I have to balance the rest of my Cash flow! ha ha

    Thanks for your help, my book is very vague on proposed dividends. :D

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