Do cash dividends paid affect a company's breakeven point? Original blog posting (August 1, 2017)

“Big Oil Reaches for a Modest Goal: Breaking Even….” Above is a headline from Wall Street Journal blog In 2016, large oil companies did not make enough money to cover costs Dividends from these companies are at risk due to lack of cash https://www.123rf.com/profile_jaochainoi

Question 1 What is a breakeven point? What is the formula for the breakeven point?

Question 2 Are cash dividends paid treated as expenses?

Question 3 What is the accounting treatment for a company’s cash dividends declared? For its cash dividends paid? 

Question 4 What might be a better title for the Wall Street Journal blog post referenced in the story above?

Question Recap What is a breakeven point? What is the formula for the breakeven point? Are cash dividends paid treated as expenses? What is the accounting treatment for a company’s cash dividends declared? For its cash dividends paid?  What might be a better title for the Wall Street Journal blog post referenced in the story above?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu