Replies to post #73872 on 8000 Incorporated (EIGH)

[loanranger]

janice:
"The company knew perfectly well that cash divvies have to be paid out of retained earnings."

I didn't know that. Can you source it, please?

[scion]

Dividends

The Board of Directors must authorize all dividends. A dividend may distribute cash, assets, or the corporation's own stock to its stockholders. Distribution of assets, also called property dividends, will not be discussed here. Before authorizing a dividend, a company must have sufficient retained earnings and cash (cash dividend) or sufficient authorized stock (stock dividend). Three dates are relevant when accounting for dividends:


Date of declaration.

Date of record.

Date of payment or distribution.
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http://www.cliffsnotes.com/study_guide/Dividends.topicArticleId-21248,articleId-21194.html