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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 2608
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I am working on a school paper gh school accounting

Customer Question

I am working on a school paper for my high school accounting class.....if a c-corp has negative, unappropriated retained earnings, can that be because the stock holders have not received any dividends? Or does it mean they paid dividends to stock holders and put them in the red? This would be for a c corp with 4-6 stock holders. If neither is the case can anyone give me a auggestion as to why they would be in the negative......This is the hardest class i tell ya.
Submitted: 1 year ago.
Category: Finance
Expert:  Taxtom replied 1 year ago.

This the best description I could find that describes the different possibilities

http://www.accountingtools.com/questions-and-answers/what-are-negative-retained-earnings.html

Thanks Tom

Customer: replied 1 year ago.
I found that site already. My question is if it is howing negative, does that mean the company actually paid the share holders or is it that is what the company owes the share holders?
Expert:  Taxtom replied 1 year ago.

It can mean they have paid out dividends but may just represent losses over one or more years have accumulated into a negative position. In most cases the company would show bank loans or other payables that would allow them to be in this position. It is rare now for companies to actually pay dividends, even on preferred stock, when funds are unavailable though earnings. They would accumulate the dividend as a payable and pay when they return to profitability.

Thanks Tom