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QUESTION 31
A company has $120,000 of 8% preference shares in issue. During the year an interim
dividend was paid to preference shareholders of $5,000.
What is the year end preference dividend provision?
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preference dividends are just as loan interest for a company there should not be provision, its either an accrual if its a cumulative preference share and no adjustment nesessary if its a non-cumulative 1, the charge to income statement should be (120,000*8%)=9600
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