Dividends help needed in DFS!!! please

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:24AM in AAT student discussion
i just dont get dividends!

i am working on DFS paper June 2005 and only got as far part Q1 (not good is it) does anyone have this paper that can tell me how they got the answer of £4000.

The Dividend of 1600 from the TB plus 2400 = 4000, but where have they got the 2400 from???

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Dividends help needed in DFS!!! please

    Hiya,
    I am just doing this paper at the moment, but taking a break coz I hate writing about ratios!
    You get the £4000 because.....

    Share capital = £10,000. However each share is 25p. So actual no. of shares is 10,000/0.25 = 40,000 shares.
    Therefore, dividend at 0.06p per share = 40,000 x 0.06 = £2,400
    £1,600 interim dividend + £2,400 final dividend = £4,000

    Hope that helps!
    miny
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Dividends help needed in DFS!!! please

    oh your a star thanks :-)
    good luck with your exam
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Dividends help needed in DFS!!! please

    Hi

    I believe the dividend of £4000 is made up of £2400 interim dividend and £1600 proposed final dividend. However FRS21 has now come in for this exam and proposed final dividends are not enetered into the accounts.

    Therefore the correct thing to do now is only use the interim dividend but the answers for the paper will have used £4000 as that was the correct thing to do then.

    This is what my teacher told us, I hope that makes sense?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Dividends help needed in DFS!!! please

    Oh lordy!!
    I recall that FRS 21 says dividends now a non adjusting post balance sheet event, but never even occured to me that it means don't do this adjustment in exams, which we've had to do in nearly every practice question!!
    arrgggggggggggggggh!
    Thanks for the tip!
    Miny
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Dividends help needed in DFS!!! please

    Sorry, I didn't mean to panic anyone. Just don't calculate or include proposed dividends in the financial statments.

    At the end of the day it's a minor mark in the whole exam so don't get stressed about it. I'm sure lots of people are going to included the proposed dividends if the info to calculate them is given, and i'm sure they will still pass.

    Good luck.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Dividends help needed in DFS!!! please

    Help! Now I'm confused. Our tutor hasn't mentioned this at all. I've read the notes on FRS21 and it says it is "mandatory for accounting periods beginning on or after 1 January 2005". Surely in the exam the accounting periods we deal with must start before this date as it is not yet the end of the year! I would expect March or October 04 as beginning dates. Therefore we can still put proposed dividends in??? But wise to know the future implications in case of a question on it?


    Seren
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Dividends help needed in DFS!!! please

    I was told that we would be examined pre-2005 so the proposed dividend amendment will not come into this coming exam. But I agree it does'nt hurt to know it.

    sharon

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