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Allegra, a limited liability company, provides the following information about
dividends in the year ended 31 August 2010:
21 Sept 2009 Final equity dividend for year ended 31 August 2009 declared $26,000
21 Oct 2009 Final equity dividend for year ended 31 August 2009 paid
31 March 2010 Interim equity dividend for the year ended 31 August 2010 paid $17,000
18 August 2010 Final equity dividend for year ended 31 August 2010 proposed $28,000
20 August 2010 Final equity dividend for year ended 31 August 2010 declared $28,000
What amounts should be disclosed in the statement of changes in equity and statement of financial position of Allegra for the yer ended 31 August 2010?
SOCIE SOFP
A $43,000 Nil
B $43,000 $28,000
C $45,000 $28,000
D $45,000 Nil
Sir, correct answer is A, but i didn’t understand why? Why 28000 declared dividend isn’t included in SOCIE and SOFP?It should be. Are you certain that you have copied the dates correctly?
Yes,i have copied it correctly..Explanation as follows:
Final equity dividend for year ended 31st August 2009 26,000
Interim equity dividend for year ended 31st August 2010 17,000
Total dividend in SOCIE 43,000
Tutorial note: Equity dividends are not accounted for until officially approved
by the shareholders. In practice this rarely occurs before the year end and
therefore it is very rare to find a liability for equity dividends in the statement of
financial position. Proposed dividends are disclosed in a note to the financial
statements. Actual equity dividends paid are shown in the SOCIE.
Sir, as this explanation 28000 isn’t included in the statements because it is declared before the year end (20 August 2010)..Is it correct attitude?
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