Income statement dividends

It also shows the net income for year 1. It is important to understand that the terms net income and earnings are used interchangeably in financial reports. You will note that the net income for year 1 is 300,000. The balance sheet (Table 15-2) shows retained earnings of 200,000. This is the portion of the net income that the owners have reinvested in the business. Where did the rest ( 100,000) of the net income go It was redistributed among owners as dividends (as depicted in Table 15-4). The connection between the net income value from the income statement and retained earnings from the balance sheet is an example of how these two reports are linked. In this particular example, the details of this linkage can be examined by the statement of retained earnings (Table 15-4). 

Part 2 consists of the financial position, capital expenditures, funds availability, and results of operations. Consolidated balance sheets, income statements, and selected quarterly data, as well as stock prices and dividends per share, may be found in Part 2. Any disagreements on accounting and financial disclosure are explained in narrative format. 

The earlier observation about the variation in accuracy of line items in the balance sheet also applies to the income statement. For example, while items such as salary and interest and dividends earned can be listed to the nearest penny in a retrospective income statement, expense items such as entertainment/travel and clothing would be estimates unless unusually meticulous records were kept. Variation of accuracy within the income statement does not in any significant way detract from its usefulness as an analysis and planning tool. 

As an example of dividends being paid out to preferred stockholders first, see the income statement, Table 4.3, Note 1 PepsiCo s dividends paid to preferred stockholders and redemption premium totaled 8M period ending 2013. 6,740 - 8 = 6,732. Thus, 6,732 is net income available to common stockholders. 

---