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A company has authorised capital of 50000 5% preference shares of $2 each and 500000 ordinary shares with a par value of 20c each. All preference shares have been issued, and 400000 ordinary shares have been issued at a premium of 30c each. Interim dividends of 5c per share plus half the preference dividend have been paid during the current year. A final dividend of 15c per ordinary share is declared and half the preference dividend. The total dividend payable for the year is:
The answer is :$85000
Unfortunately, I did not be able to figure how to tackle this question
I would be grateful if you can help me, Sir.
This question is not asking what dividends will be actually recorded this year, but what dividend is there in total relating to this year.
The ordinary dividend for this year is 400,000 shares x (5c + 15c) = 80,000.
The preference dividends is 50,000 x $2 x 5% = 5,000So the total is $85,000
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