Question

The following information has been compiled from the accounting records of Muddy Ltd for the year ended 30 June 2020. Final dividend payable $500,000 - (30/06/2019); $850,000 - (30/06/2020) Retained earnings $7,600,000- (30/06/2019); $8,300,000 - (30/06/2020) During the year ended 30 June 2020, the company declared and paid interim dividend to all ordinary shareholders and issued 500,000 shares at $2.00 per share in cash in March 2020. The management transferred $600,000 from the retained earnings account on 30 June 2020 to set up a property maintenance reserve account in preparation of some major maintenance work suggested by the Health and Safety department. Muddy Ltd reported $3,000,000 profit for the year ended 30 June 2020. Required:Calculate the amount of interim dividend paid in cash.

Answer 1

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Interim DIvidend paid in cash is 850,000 (balancing figure) as can be seen from the account shown below..