HA2032 Corporate And Financial Accounting - Assignment 1

Week 2 Question (10 marks)

The following data relates to ABC Ltd:

• Profit for the year ended 30 June 20X1, $500,000.
• On 31 March 20X1, the directors decided to pay an interim cash dividend of $100,000.
• On 7 April 20X1, the interim dividend was paid.
• For final dividends, the company’s constitution provides that the directors can recommend a dividend to be subsequently declared by a resolution of the members in a general meeting.
• The directors recommended a final dividend of $250,000 to be paid.
• The shareholders accepted the final dividend at the annual general meeting, and payment was made on 14 September 20X1.

Required:

1. Prepare journal entries to record the above dividend payments. (6 marks)
2. Prepare the retained profits general ledger account. (4 marks)