Calculation of Profit before tax indirectly using available information from Qn

Hello sir..!

I have a doubt relating to a question from ACCA STUDY HUB Practice Qn from Chapter 13 : Capital Structure and Finance Costs.

The question goes:

A company’s assets and liabilities at the beginning ( 1 January )and end(31 December) of a year respectively were as follows:

Non-current assets 100,000 150,000
Current assets 120,000 110,000
Payables & accrued expenses 30,000 40,000
Liability for taxation 20,000 18,000
Issued equity shares of $1 100,000 125,000
Share premium 5,000 10,000
Reserves 50,000 ?(Closing amount not given)
Dividends payable 15,000 20,000

During the year, the company issued a further 25,000 shares at $1.20 whilst cash payments of $20,000 for dividends and $22,000 for taxation were made.

What was the company’s profit before taxation for the year?

A.$36,000
B.$39,000
C.$42,000
D.$48,000

The provided answer is as follows:

The correct answer is C.

Opening net assets (100 + 120 ? 30 ? 20 ? 15) 155,000
Closing net assets (150 + 110 ? 40 ? 18 ? 20) 182,000

Increase in net assets 27,000

Add: Dividends appropriated (20 ? 15 + 20) 25,000
Tax charge (22 ? 20 + 18) 20,000

Less: Proceeds of share issue (30,000)

Profit before tax 42,000

I don’t understand why they have adjusted $25000 for DIVIDEND.

Shouldn’t DIVIDEND PAID be accounted for on CASH BASIS and only the cash dividend paid of $20000 be adjusted to arrive at the PROFIT BEFORE TAX figure.

I attempted this Qn in the following way:

Firstly, I calculated the closing EQUITY Bal as $182000.
Then I arrived at closing RESERVES amounting to $47000 as a balancing figure (since other items in equity are already given in the question )
So, the movement from opening reserves to closing (i.e earnings for the year) would be -3000
Then I added back DIVIDEND PAID ($20000) AND TAX EXPENSE CHARGED ($20000) to this -3000.

This amounted to $37000 as PROFIT BEFORE TAX.

Could you kindly explain the adjustment relating to DIVIDEND in this question.

Kindly forgive if the message was too lengthy. Thanks in advance…