Incorrect Cash Balance in Investment Account after processing a Dividend Reinvestment in Reckon Accounts

Legacy KB ID: 4736

Question

Why does the Dividend Reinvestment transaction in ReckonAccounts 2013 result in an incorrect Cash Balance on my Investment Account? 

I am expecting a balance equal to my carried forward figure as stated on my Dividend Statement, but I get a negative balance if the carried forward amount is less than the previous carried forward amount and a positive balance if this carried forward amount is greater than the previous carried forward amount. 

 

Answer

The Dividend Reinvestment transaction in ReckonAccounts 2013 has been enhanced and may produce an incorrect result for the Cash Balance of the Investment Account under certain circumstances.

Users participating in a Dividend Reinvestment Plan for the first time will not encounter any irregular results.

Users of Reckon Accounts Personal 2012 following procedures outlined in KB4335 https://kb.reckon.com.au/issue_view.asp?ID=4335 for processing Dividend Reinvestments, and left carried forward amounts in the Investment Account’s Cash Balance, should not encounter irregular results. 

Users who have been processing Dividend Reinvestments by an alternate method may get an incorrect result for the Cash Balance, depending on how they handled the carried forward amount previously. 

As pre-2012 Quicken (now ReckonAccounts Personal) versions did not handle Dividend Reinvestment Plans comprehensively, users would have developed alternate strategies in handling the carried forward amount - KB3137 https://kb.reckon.com.au/issue_view.asp?ID=3137 provided one such method. 

 

If the carried forward amount was not left in the Cash Balance of the Investment Account, then the first Dividend Reinvestment transaction for the share cannot contain an Amount in the Cash Brought Fwd field. 

Please follow these steps to record your first Dividend Reinvestment transaction where a cash brought forward figure is required

 

Detailed steps

These steps assume that you have recorded cash carried forward amounts in a separate account – a Property & Debt account, Cash or Bank account.  It also assumes that your Cash Balance is 0.00.

If you have been participating in a Dividend Reinvestment Plan and you are new to Reckon Accounts 2013, see the section below.

 

  1. In Investing > Account > Enter Transaction > Reinvest – Income Reinvested;

2.    Enter the amount of the Franked Dividend and the Cash Brought Fwd figure into the Franked Dividend field.

This transaction will record the cash brought forward as income for this year.  This amount will be reversed by a later step;

  1. Complete the relevant fields and see that the correct price per share is calculated when the number of Shares Issued and Cash Carried Fwd are entered;
  2. Your Cash Balance will now show a balance equal to the Cash Carried Fwd;

5.    Create a new transaction – Miscellaneous Expense – to reverse the cash brought forward amount entered with the Dividend:

a.    Enter Transactions > Miscellaneous Expense

b.    Transfer Account is the account you used for cash carried forward amounts;

c.    Amount is the cash brought forward added to the Dividend Amount;

d.    Category if the cash brought forward was added to:

                                          i.    Franked Dividends then choose: _DivInc:_DivIncFranked;

                                         ii.    Unfranked Dividends, then choose: _DivIncUnFranked.

  1. Your account for carried forward amounts will be adjusted.  If you have shares in only one company then the balance will be 0.00;
  2. View the Investment Income Report:  Reports > Investing > Investment Income.  You will see Dividends showing the correct amount and the cash brought forward in the Transfer section. 

Future Dividend Reinvestment transactions will now process correctly, with you entering the amount in Cash Brought Fwd and then the other details for this dividend payment.

 

If you have been participating in a Dividend Reinvestment Plan and you are new to ReckonAccounts 2013, follow the procedure above, but as you have not made arrangements for cash carried forward, do the following:

1.    Create an Asset Account in the Property & Debt section and call it DivReinv CF;

  1. Use this account for step 5(b) above: Create a new transaction – Miscellaneous Expense – Transfer Account;
  2. The DivReinv CF will show your previous cash carried forward figure as a negative, recognising that it is money earned in a previous accounting system and applied to a transaction in this accounting system. 

4.    You may hide this account:

a.    In the Accounts Bar on the left, right-click the DivReinv CF account;

b.    select Delete/Hide accounts;

c.    Place a tick in the box under the Hide heading > Close;

    1. The amount for the account will be greyed out. 


Need more help?

Ask the Reckon Community at: https://community.reckon.com/categories/reckonaccounts

Or

Log a Support Ticket: https://www.reckon.com/au/support/

 

How did we do?

Error: This does not appear to be the same computer your copy of Reckon Accounts was originally....

Cannot print a report from Reckon Accounts 2013 - encountered a problem and needs to close

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