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Promulgate’s trial balance as at 31 December 2915 showed credit amounts of $500,000,000 and $80,000,000 against the $1 equity shares and the share premium account respectively. On 1 September 2015 Promulgate had correctly accounted for a fully subscribed 1 for 4 rights issue at an exercise price of $1.20 each.
Promulgate had paid two dividends in the year. The first dividend payment of 4 cents per share was in March and the second dividend payment of 2.5 cents per share was paid in November.
What was the total dividend payment made by Promulgate during the year ended 31 December 2015?
May you show me the workings for that question and the answer please?If there were $500,000,000 shares as at the END of the year and there had been a 1 for 4 issue of shares during the year, then there must have been $400,000,000 shares before that bonus issue from 1 January, 2015 right through until the bonus issue on 1 September, 2015
So the dividend of 4 cents per share in March was paid to the holders of 400,000,000 shares and that computes to $16,000,000 and the dividend of 2.5 cents per share in November was paid to the holders of 500,000,000 shares and that computes to $12,500,000 giving a total of $28,500,000
OK?
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