CenterPoint® Fund Accounting - Patronage Dividends

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Receipt for Dividend Payment Video - Duration: 7 min 11 sec

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A patronage dividend is a taxable distribution made by a cooperative to its members or patrons. Dividend income is often a combination of a cash receipt income and a non- cash portion that increases the stock asset. Both portions are taxable and increase an income account, but only the cash portion affects the bank account. The cash and non- cash portions can be entered in one simple transaction.

Prerequisite

The database must have one asset and one revenue/income accounts setup for stocks/dividend processing. Note: if you prefer to separate non cash vs cash dividend income, then two revenue/income accounts and one asset account will be needed).

  • Stock (asset account)
  • Stock Dividends (revenue/income account)

Enter a Cash Receipt for the Patronage Dividend

  1. Select Processes > Sales > Receipts.

  1. Select the Bank Account where the cash portion of the dividend will be deposited.
  2. If using bank deposits, a Bank Deposit can also be selected.
  3. In the Received From field, select the appropriate name.
  4. Specify the Date of the receipt.
  5. Specify the portion of the dividend received as "cash" in the Amount field.
  6. The Payment Type and Check/Ref # can also be specified. If the payment type you selected was assigned a payment type of Other, the account assigned to the payment type will display in the Account box, and the Bank Account and Bank Deposit lookups are disabled. Instead of the bank account, the “Payment Type Account” is used as the offset to all journal entries on the Receipts screen. If you want to repeat the previous line's Invoice/Ref# entry, right-click in the Invoice/Ref # column and select Repeat Previous Value.
  7. In the first Account field, select the income account for Stock Dividends. In the Amount field on the same line, specify the total amount of dividends received (total cash and non cash amounts received).
  8. In the next row, select the asset account for stock (in our example, Co-op Stock) in the Account field. The Amount will default the non-cash portion of the dividends received. Note: This amount should be a negative, which will increase the asset account as it's being entered as a receipt transaction.
Note: If you want to attach a document to this transaction, see the Attach Documents to Transactions topic for detailed information.
  1. Click Save to complete the transaction.
Note: If you prefer the income portion of the entry be separated between cash and non- cash income, then you will need two revenue accounts setup. The transaction will then have three rows as displayed below:

Document: 3080

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