Dividends

Cracker Co, a limited liability entity, had issued share capital throughout 20X7 as follows:

Ordinary share capital (50c shares) $200,000

8% Irredeemable preference share capital $50,000

Cracker Co paid an interim dividend (i.e. a dividend declared part way through the financial year) of 12.5c per share to its ordinary shareholders and paid the dividend due on the preference shares, although this is not mandatory. Prior to the year-end Cracker Co proposed a final dividend of 36.5c per share to its ordinary shareholders.

Calculate the amounts shown in the statement of changes in equity (SOCIE) and statement of financial position (SFP) in relation to dividends for the year ended 31 December 20X7.

SOCIE: $200000 SFP: $150000
B SOCIE: $54000 SFP; nil
C. SOCIE: $200000 SFP:$146000
D. SOCIE: $101000 SFP: $72000

The answer for this question is option B
The dividend paid for
Interim divident -50,000
Preference dividend -4000
The proposed dividend will not be recognized until dividend is actually paid so no impact.

My question is the total dividend of 54000 is recognize in SOCIE as it decreases the retain earning …. similarly in SFP as well same 54000 will decrease retain earning and cash why is SFP nil? Shouldn’t there be some impact from interim and preference dividend.