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Another doubt regarding dividends. For the question below the Answer is D and my doubt is why don’t we include the value for dividend as 140,000 in SOFP, as this was paid in the financial year of 30 June 20X6?
The following information is available about a company’s dividends:
$
20X5
Sept. Final dividend for the year ended 30 June 20X5 paid (declared August
20X5)
100,000
20X6
March Interim dividend for the year ended 30 June 20X6 paid 40,000
Sept. Final dividend for the year ended 30 June 20X6 paid (declared August
20X6)
120,000
What figures, if any, should be disclosed in the company’s statement of profit or loss and other
comprehensive income for the year ended 30 June 20X6 and its statement of financial position as at
that date?
SPLOCI for the period SOFP liability
A $160,000 deduction $120,000
B $140,000 deduction nil
C nil $120,000
D nil nilDividends never ever appear in the SOPL (which now makes the answer C or D).
In the SOFP we only show dividends that have been declared but not yet paid at the end of the year i.e. any liability at the end of the year).
Since 140,000 had been paid during the year, it is not owing at the end of the year and therefore does not appear in the SOFP 🙂
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