DIVIDENDS *Stock and transfer book – the

book of corporation where the

record is written.
 Distribution to the shareholders of
*No Entry
cash, property, stocks from
unrestricted retained earnings on the
3. Date of Payment – the date of
basis of all issued and fully paid
actual distribution.
shares, and all subscribed par value
April 1
shares except treasury shares.
Dividends Payable XXX
Operation  Income  Retained Cash XXX
Earnings  DividendsIssued and
subscribed shareholders Sources of Obligation
1. Legal – when the government
1. Restricted Retained Earnings – requires you to pay tax or you
may pinaglalaanan na, di pwede have to pay something with a
ipamigay as dividends. contract.
2. Unrestricted Retained Earnings – 2. Constructive – You don’t actually
pwede ipamigay as dividends have obligation but you obliged
yourself. *Kapag may pinaasa ka*
*Subscribed shareholders can only
receive their dividends once they
are fully paid.
*Issues Shares – Treasury =
Outstanding Shares
*Outstanding shareholders are the one
who will actually receive dividends.
*Dividend declaration is not required.

3 IMPORTANT DATES
1. Date of declaration – when board
of directors announce that they
are going to distribute dividends.
Feb 1
Retained Earnings XXX
Dividends Payable XXX

*Normal balance of retained earnings is

credit.

2. Date of record – The

duedate/cutoff of records