Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

M Limited shows the following balances at 1 January 2021. Ordinary share capital: $500000$ shares of $0.50$ each = $250000$ Share premium: $10000$ General reserve: $40000$ Retained earnings: $50000$ In the year ended 31 December 2021: 1. $0.02$ per share was paid as an interim dividend 2. $20000$ was transferred into the general reserve For the year ended 31 December 2021, the company reported a profit for the year of $80000$. What is the maximum extra dividend payable per ordinary share for the year ended 31 December 2021?

  • A$0.20$
  • B$0.22$
  • C$0.32$
  • D$0.34$

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