The following is the equity of a company on 30 June 2009 Share capital (fully pa

Question

The following is the equity of a company on 30 June 2009 Share capital (fully paid @ $2) $800,000 GeneralReserve                      $350,000 RetainedEarnings                     $40,000 Total                                        $1,190,00 Q: on 30th June 2010, directors declared a final dividend of10c per share in cash out of profits made in current year. What arejournal entries and figures? Profit was $330,000 The following is the equity of a company on 30 June 2009 Share capital (fully paid @ $2) $800,000 GeneralReserve                      $350,000 RetainedEarnings                     $40,000 Total                                        $1,190,00 Q: on 30th June 2010, directors declared a final dividend of10c per share in cash out of profits made in current year. What arejournal entries and figures? Profit was $330,000

Explanation / Answer

30June2010          Retained Earnings(Dr.)                  $40000
                                               DividendsPayable(Cr.)                   $40000                              ( $800000 / $2 = 400000 shares                                   dividend= 0.1 *400000)                  

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