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QUESTION 33
The following is the position at the end of June 2008
Ordinary Share Capital (75c shares) $225,000
7% Irredeemable Preference Shares $100,000
The company pays an interim dividend of 5c per share to ordinary shareholders and the
fixed dividend to preference shareholders. The company declares a final dividend prior to
the year-end of 15c per share to its ordinary shareholders.
What amounts should be shown in the SOCIE and Statement of Financial Position in relation
to dividends?
SOCIE Statement of Financial Position
A $130,000 NIL
B $130,000 $45,000
C $60,000 $45,000
D $60,000 NIL- Topics: 0
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preference dividends dont go to SOCIE it goes to SOCI as interest charge,
so interim dividend = (225,000/.75)=(300,000*0.05)=15000 this 1 is paid and goes to cash flow statement and statement of changes of equity and the journal entry dividend dr.15000
cash cr. 15000and the final dividend is declared but not paid so is a year end liablity and the calculation is (300,000*0.15)=45,000 and the journal entry is
dividend dr. 45,000
divident payable cr. 45,000so SOCIE will record 60,000
and SOFP will record 45,000
and SOFP will record 15,000
to complete double entries so the answer is C
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