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scents had following balances:
2004————–2005
loan interest accrual $5000——– $3000
apprvd ordinary dividnd $20000–$25000
10%loan notes. $100000–$100000
ordinary share capital $150000-$150000
8%pref. share capital $50000-$50000
How much will appear in the st. of cash flow for the year ended 30sep 2005 for the ordinary dividend paid?
a.$20000 b.$24000 c.$25000 d.$29000You must have an answer in the same book in which you found the question!
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well,sir the solution says the answer is $20000.which is dividend related to 2004.
but the question also mentioned approved dividend $25000 related to 2005.
my concern is that,is the dividend approved for the year will paid in the next year.
eg. $25000 approved in 2005 will paid in 2006??Yes. If there is a balance for approved dividend on the SOFP then it means that it has not been paid (and is showing as a current liability).
So the dividend owing at the end of 2005 will be paid in 2006.
The dividend actually paid in 2005 will have been the dividend that was owing at the end of 2004 (i.e. 20,000)thank you very much sir!
one more question,
interest on cash deposits at the bank amounted $75.
in statement of cash flow is this going to effect investment income under operating activity and the interest received under investing activity?
I think as this is only a bank deposits and not investment so that will only effect operating activity not investment activity.
please explain sir!
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