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.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹1,20,000
The proposed dividend shown at the end of a year is paid in the next year. So the dividend paid during 2021-22 is last year’s proposed dividend plus the interim dividend paid during the year.
Proposed dividend of 31 March 2021, paid during the year = ₹40,000
Interim dividend = 20% × ₹4,00,000 = ₹80,000
Dividend paid during the year = ₹40,000 + ₹80,000 = ₹1,20,000
The proposed dividend of ₹60,000 at 31 March 2022 will be paid only in the following year, so adding it (₹1,40,000) is a common slip.