ACCOUNTANCY FORM 6 – COMPANY ACCOUNT 1.2

Dividend:-

The term dividend originates form a Latin word “Dividend” meaning to dividend.  It is that part of the profit of a company which is distributed among its share holders.

TYPES OF DIVIDEND:-

(a)       Interim Dividend

(b)       Proposed Dividend

(a)       INTERIM DIVIDEND

            The word “Interim” originates from Latin meaning “in the meantime”

It is a dividend which is declared before the close of the company’s financial period.

(b)       PROPOSED DIVIDEND:-

This is only provided for and so not paid before the accounts are closed.It’s shown itself among items on the Balance sheet as “proposed dividend or unpaid dividend”

To the credit side of the appropriation A/c is included such items as the Net profit made during the year and balance of profit it from the previous year.

DR     APPROPRIATION ACCOUNT FOR THE YEAR ENDED 31STDEC1999   CR

                     BALANCE SHEET AS AT 31/12/1999

EXERCISE:-

Here is a trial balance of RF Ltd as at 31^st June 2008.

Given the following information as at 30^th June 2008, drawn up a set of financial statements for the year to that date.

(i)        Stock 30^th June 2008 Tshs.  4937.

(ii)       The share capital consisted of 25000 ordinary shares of sh. Each and 25000 10 per cent preference shares was proposed to be paid as well as a dividend of 20 per cent on the ordinary shares.

(iii)     Accrued rent Tshs. 700.  Directors remuneration Tshs. 2500.

(iv)      Debentures interest ½ years interest owing.

(v)       Depreciation cost equipment 10 percent reserve, motors 20%.

(vi)      Transfers to Reserve; General reserve Tshs. 2000. Fixed assets replacement reserve Tshs. 1,000.

(vii)    Provide 50% as corporation tax payable.

PROFIT &TRADING & LOSS APPROPRIATION ACCOUNT & B/SHEET.

               BALANCE SHEET AS AT30TH JUNE 2008