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  • Category: Exam Questions

    Accountancy and cash flow statement


    Are you facing a problem in preparing cash flow statement? Looking out for how to fix the issue of more than one dividend? Find answers from ISC experts on this page for your issues.

    How do we treat in-cashflow when we are given provision for dividend and also reserve fund.
    Suppose in income statement, provision for dividend is given, also in balance sheet both year provision for dividend is given.
    In balance sheet retained earning is also given.
    Now there will be two dividends, how to fix this?
  • Answers

    2 Answers found.
  • In one year balance, one should not give provision for dividend for two years. The dividend will be decided based on the profits and will be proposed and will be accepted in the Board of Director's meeting. Once it is accepted you have to finalise your balance sheet and you have to show the provision for payment of dividend and surplus amount after payment of the dividend will also be calculated based on the proposed dividend. The tax payment will be made on the net profit after payment of dividend.
    This year balance sheet will show this year dividend proposal but not for two years. There is something in this practice. No two years dividend will be shown in a one-year balance sheet. Still, if you are not clear try to contact a practising CA who will tell you about this issue.

    drrao
    always confident


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