- This topic has 1 reply, 2 voices, and was last updated 5 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for December 2024 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Preference shares
If an exam question says 8% redeemable preference shares were issued on 1 April 20×8 @ par for $20 million, and the dividend paid was $800,000 within the year.
The question requires the preparation of a single entity financial statements from a trial balance as at 30 Sep 20×8
Question
To calculate a full year dividend?
Is it 8% of $20million = $1600,000
The period of time that the preference shares were issued is 6 months.
$1600000×6/12 = $800,000 dividend paid on trial balance.
Accural the remaining 6 mths =$800 000. Should the accural be $400, 000? The answer in the exam kit (CANDEL Q.351) says to accrual $400.
I am not sure how the $400 was worked out.
Hi,
If the preference shares have been in issues for 6-months then only half of the dividend will need to be recorded. Given that half of the dividend has been recorded then there is no requirement to make any accrual.
Thanks