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 Jim Ltd Profit & Loss Appropriation for the year ended 31 December 2007
Workings: W1 Preference share dividend for the year =$100,000 x 10%=$10,000 per annum =$10,000-$5,000=$5,000 Therefore the director recommend $5,000 for preference share dividend. W2 Proposed ordinary share dividend=$0.5 x 200,000 per unit=$100,000 |