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Hi John. I’m a bit confused by this question:
ABC Co has the ff Share Cap:
100 000 6% iredeemable pref.shares.
200 000 50c Ordinary shares.
Retained earnings at the beginning of the yr were $125 000.
During the yr ended 31/12 x7 it made the ff profit:
Profit before tax. $60 000
Income tax Exp. ($10 000)
Profit for the year. $50 000.
Ord.dividends paid and declared during the yr were as ff:
Interim div.paid 5c per share.
Final div.declared on 20 Jan X8 10c per share.
Required: Show the movement in Retained earnings for the yr ended Dec x7. I don’t yet have a good grasp of this section, I’d really appreciate your kind help. God BlessIn future you must ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.
The ratings earnings will increase by the profit for the year of 50,000. It will decrease by the preference dividend of 6,000 and by the ordinary dividend paid of 200,000 x $0.05.
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