Tiwari & Company Ltd have issued 100,000 5% redeemable preference shares of $1 each and 600,000 ordinary shares of $0.50 each. All the shares are fully paid.

Tiwari and Company Ltd provided the following information relating to the year ended 30 June 20–8:

On 30 June 20–8 it was decided to transfer $10,000 to the general reserve and to pay a final dividend of 10% on the ordinary shares.

a. Calculate the profit for the year ended 30 June 20–8 after the preference share dividend. Show your workings.
b. Prepare the statement of changes in equity of Tiwari & Company Ltd for the year ended 30 June 20–8.
c. Prepare a relevant extract from the statement of financial position of Tiwari & Company Ltd at 30 June 2008 showing the equity and reserves section.
d. Explain which dividends (if any) would appear in the statement of financial position of Tiwari and Company Ltd at 30 June 20–8. Give reasons for your answer.

Transcribed Image Text:

%24 20-7 July 1 Retained earnings 9500 General reserve 12000 Dec 31 Dividends paid: Half year dividend on preference shares Interim dividend of 5% on ordinary shares 20-8 June 30 Profit for the year before preference share dividend 59 000 Dividend paid: Half year dividend on preference shares