Afternoon mock q-59 declared, income, should, still

optiix

the answer explanation adds back dividends from ending retained earnings to calculate Net income.

The dividend is just declared and not paid in 2008, should we still treat it as if it is paid?

cyber21

Yeah, If they were declared in 2008 they would have to have been paid in the same year correct?

sdada

bk, yep, you should assume that.

rkapoor

i thought the moment its declared it comes out of RE via dividend payable (increase liability hold assets constant means it must have come out of equity/RE), so it would need to be added back to RE to get NI...

dece2011

u dont have to assume that the dividends are paid in cash the same pd. They just stay in div/payables until they are paid. But except for current ratios, it wont make much difference.