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Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account?
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Dividend @ 10% is proposed also provide for dividend for tax @ 17% of ...
Effects of Dividend Declaration on Balance Sheet and Profit and Loss Account in Banking
Balance Sheet:
- Assets: The cash balance will decrease by the amount of dividend proposed to be distributed.
- Liabilities: The proposed dividend will be shown as a liability under 'Dividend Payable'.
- Equity: The retained earnings will decrease by the total amount of dividend proposed to be distributed.
Profit and Loss Account:
- Income: There will be a reduction in the Net Profit after the declaration of dividend.
- Expenses: A provision for tax on dividend at 17% will be made which will reduce the net profit further.
Explanation:
When a dividend at 10% is proposed, it will impact the balance sheet by reducing the cash balance and decreasing the retained earnings. The liability for the proposed dividend will be recorded under 'Dividend Payable'.
The profit and loss account will show a decrease in net profit due to the payment of dividend. Additionally, a provision for tax on the dividend at 17% will be made which will further reduce the net profit. This provision for tax will be shown as an expense in the profit and loss account.
Overall, the declaration of dividend will result in a decrease in the company's assets and equity on the balance sheet, as well as a decrease in net profit on the profit and loss account.
Balance Sheet:
- Assets: The cash balance will decrease by the amount of dividend proposed to be distributed.
- Liabilities: The proposed dividend will be shown as a liability under 'Dividend Payable'.
- Equity: The retained earnings will decrease by the total amount of dividend proposed to be distributed.
Profit and Loss Account:
- Income: There will be a reduction in the Net Profit after the declaration of dividend.
- Expenses: A provision for tax on dividend at 17% will be made which will reduce the net profit further.
Explanation:
When a dividend at 10% is proposed, it will impact the balance sheet by reducing the cash balance and decreasing the retained earnings. The liability for the proposed dividend will be recorded under 'Dividend Payable'.
The profit and loss account will show a decrease in net profit due to the payment of dividend. Additionally, a provision for tax on the dividend at 17% will be made which will further reduce the net profit. This provision for tax will be shown as an expense in the profit and loss account.
Overall, the declaration of dividend will result in a decrease in the company's assets and equity on the balance sheet, as well as a decrease in net profit on the profit and loss account.
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Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account?
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Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account?.
Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Dividend @ 10% is proposed also provide for dividend for tax @ 17% of the amount proposed to be distributed. tell it's two effects in balance sheet and profit and loss account in banking account?.
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