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Post Info TOPIC: How do you post directors dividends for end of year and interim on sage?


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How do you post directors dividends for end of year and interim on sage?


Hi

Who else is working on such a beautiful day? So unfair!

I have got to post interim dividends paid and final dividend on sage and I know it has to show after profit so that the correct corporation tax can be calculated but what code and chart of accounts should it go to? Presumabley if profit is nom code 3200, then 3201??

Thanks!



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Veteran Member

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Posts: 71
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Working on a beautiful day, yes.....but being able to pop in to the garden for a cup of tea and a blast of sunshine..........priceless.biggrinbiggrinbiggrin

Spent 20 years chained to a Corporate desk, night and day....never knew what season it was let alone whether it was sunny.nonono†Never again... biggrin

Anyway.....the following is taken from the Ask Sage (only available for support members) website. Hope it helps.....confirms your thoughts of code 3201.

.....

How to record proposed dividends
Summary
Answer

Dividends are part of the appropriation of a company's profit. The dividend amount is decided by the board of directors of a company and then agreed by the shareholders of the company.

Appropriation of profit should appear on the Profit and Loss report after the net profit figure. As Sage Accounts does not allow this we suggest the dividend entries be posted to a nominal code in the Capital and Reserve section of the Balance Sheet report and a liability nominal code on the Balance Sheet report, where it remains until paid.

The dividend value in the Capital and Reserve section of the Balance Sheet report can either remain in the dividend account, or be moved to the profit and loss nominal code.

This article contains the following sections:

  • To record the proposed dividend - When you decide on the proposed dividend amount, you should record this in Sage Accounts. When posted, this value appears as a Liability on your Balance Sheet report, and updates the Capital and Reserves section of your Balance Sheet report.
  • To pay the dividend - When you are ready to pay the dividend, you should post a bank payment to the Dividend Liability nominal code. This reduces your bank account balance and the balance on the Dividend Liability nominal code.

To create the dividend nominal codes

If the following nominal codes are not present on your Nominal list, you should create them before proceeding. If you already have these nominal codes, then please proceed to the following section To record the proposed dividend. If you are using the Sage default Nominal ledger structure, we suggest you use the following codes:

N/CNameManagement ReportSection of Report
3201DividendsBalance SheetCapital & Reserves
2290Dividend LiabilityBalance SheetCurrent Liabilities
  1. Open the Company module, from the Links pane select Nominal Ledger then click Record.

    Sage Accounts v11.xx and below - Open the Nominal Ledger window then click Record.

The Nominal Record window appears.

  1. Complete the Nominal Record details as follows:
  • In the N/C box, enter the new nominal code, for example, 3201.
  • In the Name box enter the nominal code name, for example, Dividends.

    Note: For further information about the new nominal codes, please refer to the above table.
  1. To save the new nominal code, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The nominal code is created and the Nominal Record clears.

    If required, repeat steps 2 and 3 to create further nominal codes.

  2. To close the Nominal Record and return to the Nominal Ledger window, click Close.

You have now created your new nominal codes. You should also check your Chart of Accounts to ensure that the new nominal codes you have created are correctly represented. For further information about this, press F1 to open the Help system.

When you are ready to record the proposed dividend, please refer to the following section.


To record the proposed dividend

Note: In this example a proposed dividend of £5000 is to be recorded.

  1. Open the Company module, then from the Tasks pane select New Journal.

    Sage Accounts v11.xx and below - Open the Nominal Ledger module then click Journals.

    The Nominal Ledger Journals window appears.

  2. Enter a date and reference for the transaction, then enter the relevant details to record the proposed dividend, for example:
N/CNameDetailsT/CDebitCredit
3201DividendsProposed DividendT95000.00
2290Dividend LiabilityProposed DividendT95000.00
  1. To post the journal, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The journal is posted and the Nominal Ledger Journals window clears.

  2. To close the Nominal Ledger Journals window and return to the Nominal Ledger window, click Close.

You have now recorded the amount of dividend to be paid. For further information about paying the dividend please refer to the following section.


To pay the dividend

Note: In this example, you are paying a dividend of £5000.

  1. Open the Bank module then, from the Bank toolbar, click Payment.

    The Bank Payments window appears.

  2. Enter the details for the bank payment in the boxes provided, for example:

    BankDateN/CDetailsNetT/CTax
    1200Payment date2290Payment of dividend5000.00T90.00
  3. To save the payment, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The bank payment is posted and the Bank Payments window clears.

  4. To close the Bank Payments window and return to the Bank Accounts window click Close.

    The Bank Accounts window appears.

You have now successfully recorded the payment of the dividend. After posting this bank payment, the balance on the Dividend Liability nominal code should be zero.

To journal the value from the Dividend nominal code to the Profit and Loss nominal code

  1. Open the Company module, then from the Tasks pane select New Journal.

    Sage Accounts v11.xx and below - Open the Nominal Ledger module then click Journals.

    The Nominal Ledger Journals window appears.

  2. Enter a date and reference, then enter the relevant information to record the transfer of the dividend liability, for example:

    N/CNameDetailsT/CDebitCredit
    3200Profit and Loss AccountDividendsT95000.00
    3201DividendsDividendsT95000.00
  1. To post the journal, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The journal is posted and the Nominal Ledger Journals window clears.

  2. To close the Nominal Ledger Journals window and return to the Nominal Ledger window, click Close.

You have now successfully recorded the transfer from the Dividend nominal code to the Profit and Loss Account nominal code.



__________________

http://www.K3accounting.co.uk



Veteran Member

Status: Offline
Posts: 71
Date:

Working on a beautiful day, yes.....but being able to pop in to the garden for a cup of tea and a blast of sunshine..........priceless.biggrinbiggrinbiggrin

Spent 20 years chained to a Corporate desk, night and day....never knew what season it was let alone whether it was sunny.nonono†Never again... biggrin

Anyway.....the following is taken from the Ask Sage (only available for support members) website.

Hope it helps.....confirms your thoughts of code 3201.

.....

How to record proposed dividends
Summary
Answer

Dividends are part of the appropriation of a company's profit. The dividend amount is decided by the board of directors of a company and then agreed by the shareholders of the company.

Appropriation of profit should appear on the Profit and Loss report after the net profit figure. As Sage Accounts does not allow this we suggest the dividend entries be posted to a nominal code in the Capital and Reserve section of the Balance Sheet report and a liability nominal code on the Balance Sheet report, where it remains until paid.

The dividend value in the Capital and Reserve section of the Balance Sheet report can either remain in the dividend account, or be moved to the profit and loss nominal code.

This article contains the following sections:

  • To record the proposed dividend - When you decide on the proposed dividend amount, you should record this in Sage Accounts. When posted, this value appears as a Liability on your Balance Sheet report, and updates the Capital and Reserves section of your Balance Sheet report.
  • To pay the dividend - When you are ready to pay the dividend, you should post a bank payment to the Dividend Liability nominal code. This reduces your bank account balance and the balance on the Dividend Liability nominal code.

To create the dividend nominal codes

If the following nominal codes are not present on your Nominal list, you should create them before proceeding. If you already have these nominal codes, then please proceed to the following section To record the proposed dividend. If you are using the Sage default Nominal ledger structure, we suggest you use the following codes:

N/CNameManagement ReportSection of Report
3201DividendsBalance SheetCapital & Reserves
2290Dividend LiabilityBalance SheetCurrent Liabilities
  1. Open the Company module, from the Links pane select Nominal Ledger then click Record.

    Sage Accounts v11.xx and below - Open the Nominal Ledger window then click Record.

The Nominal Record window appears.

  1. Complete the Nominal Record details as follows:
  • In the N/C box, enter the new nominal code, for example, 3201.
  • In the Name box enter the nominal code name, for example, Dividends.

    Note: For further information about the new nominal codes, please refer to the above table.
  1. To save the new nominal code, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The nominal code is created and the Nominal Record clears.

    If required, repeat steps 2 and 3 to create further nominal codes.

  2. To close the Nominal Record and return to the Nominal Ledger window, click Close.

You have now created your new nominal codes. You should also check your Chart of Accounts to ensure that the new nominal codes you have created are correctly represented. For further information about this, press F1 to open the Help system.

When you are ready to record the proposed dividend, please refer to the following section.


To record the proposed dividend

Note: In this example a proposed dividend of £5000 is to be recorded.

  1. Open the Company module, then from the Tasks pane select New Journal.

    Sage Accounts v11.xx and below - Open the Nominal Ledger module then click Journals.

    The Nominal Ledger Journals window appears.

  2. Enter a date and reference for the transaction, then enter the relevant details to record the proposed dividend, for example:
N/CNameDetailsT/CDebitCredit
3201DividendsProposed DividendT95000.00
2290Dividend LiabilityProposed DividendT95000.00
  1. To post the journal, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The journal is posted and the Nominal Ledger Journals window clears.

  2. To close the Nominal Ledger Journals window and return to the Nominal Ledger window, click Close.

You have now recorded the amount of dividend to be paid. For further information about paying the dividend please refer to the following section.


To pay the dividend

Note: In this example, you are paying a dividend of £5000.

  1. Open the Bank module then, from the Bank toolbar, click Payment.

    The Bank Payments window appears.

  2. Enter the details for the bank payment in the boxes provided, for example:

    BankDateN/CDetailsNetT/CTax
    1200Payment date2290Payment of dividend5000.00T90.00
  3. To save the payment, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The bank payment is posted and the Bank Payments window clears.

  4. To close the Bank Payments window and return to the Bank Accounts window click Close.

    The Bank Accounts window appears.

You have now successfully recorded the payment of the dividend. After posting this bank payment, the balance on the Dividend Liability nominal code should be zero.

To journal the value from the Dividend nominal code to the Profit and Loss nominal code

  1. Open the Company module, then from the Tasks pane select New Journal.

    Sage Accounts v11.xx and below - Open the Nominal Ledger module then click Journals.

    The Nominal Ledger Journals window appears.

  2. Enter a date and reference, then enter the relevant information to record the transfer of the dividend liability, for example:

    N/CNameDetailsT/CDebitCredit
    3200Profit and Loss AccountDividendsT95000.00
    3201DividendsDividendsT95000.00
  1. To post the journal, click Save.

    Tip: If required, to exit without saving, click Discard then click Close.

    The journal is posted and the Nominal Ledger Journals window clears.

  2. To close the Nominal Ledger Journals window and return to the Nominal Ledger window, click Close.

You have now successfully recorded the transfer from the Dividend nominal code to the Profit and Loss Account nominal code.



__________________

http://www.K3accounting.co.uk



Guru

Status: Offline
Posts: 1286
Date:

Hi there

I dont think you can post dividends how you want to post them so they are after the profit figure.

Personally i would post it separately to the financed by section of the balance sheet under the profit and loss reserve.

Regards

MarkS



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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.



Veteran Member

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Posts: 66
Date:

THANK YOU SO MUCH, THAT IS A GREAT HELP, YOU WENT TO A LOT OF TROUBLE FOR ME AND I AM VERY GRATEFUL, CHEERS, JO



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Newbie

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Posts: 1
Date:

Thanks K3 Accounting; this is by far the most comprehensive answer I have seen on this subject. My only question is when to journal the value from the Dividend nominal code to the Profit and Loss nominal code (the final step)? Do I do this in the same financial year, before I run my year end reports, or do I need to do it at the start of the next accounting period?

Thanks,

Alec

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Posts: 26
Date:

Wow that's helpful!

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