Calculate the amount of Dividend paid during the year 2022 from the following information.

Balance of Proposed Dividend as on 31st March, 2021 was ₹40,000 and on 31st March, 2022 ₹60,000. Interim Dividend was paid @20% on share capital. Share capital was ₹4,00,000.

₹1,20,000

The correct answer is option (2)- ₹1,20,000.

Proposed dividend as on 31st March, 2021 = ₹40,000
Proposed dividend on 31st March, 2022 = ₹60,000

Interim dividend = 4,00,000 x 20/100
                        = 80,000

Dividend paid during the year = Proposed dividend as on 31st March, 2021 + Interim dividend
                                           = 40,000 + 80,000
                                           = 1,20,000

*Last year proposed dividend is paid in this current year.

Note- Proposed dividend on 31st March, 2022 = ₹60,000. It will be paid in the next year when it was declared by board of directors.