Answer To Accounting Test Question No. Ltd 2 On Limited Companies-Profit & Loss Appropriation Account
The question on this limited company asked for a simple preparation of the Profit & Loss Appropriations where the dividends are considered.
Answer Paper to Accounting Test Question No.Ltd 2 on Limited Companies
Profit & Loss Appropriation for the year ended 31 December 2007
W1 Preference share dividend for the year
=$100,000 x 10%=$10,000 per annum
Therefore the director recommend $5,000 for preference share dividend.
W2 Proposed ordinary share dividend=$0.5 x 200,000 per unit=$100,000