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i have doubt in past question paper called tabba
doubt is about dividend as retaining earning at start of year 850 and profit of the year 100ds and retaining earning end of the year is 2550 so dividend should be 1600 (2550-950) but they not taken any dividend in these question
pvt companies doesnt pay dividends? as in question starting its written its pvt company?
In its question (note ii), it says that ‘The surplus on the revaluation reserve related to the factory’. If you look at the SFP for both years, $1.6m has been taken out from revaluation reserves.
On other hand, calculation on RE balances (using columnar method) gives the following:
Bal b/f 850
SPorL 100
Amount transferred from RR (bal. fig) 1600
Bal c/f 2550Notice that the balancing figure above shows a positive figure, hence dividend payment is rule-out as all payments/ expenses should be of negative figure.
Hope this helps.
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