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taxation There are 8,000,000 ordinary shares and 5,000,000 preference shares. The Commissioner has indicated that the stated rate of the preference share dividend as not

taxation
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There are 8,000,000 ordinary shares and 5,000,000 preference shares. The Commissioner has indicated that the stated rate of the preference share dividend as not reasonable. A reasonable rate has been agreed at as being 4% and this is the rate that is to be used. Any excess over this amount - if any - is to be disallowed. The accountant would have used the 12% rate noted above. Using the information in the note above, calculate the preference share dividend adjustment (if required) for taxation purposes. Please show all workings - and state any assumptions made - on the lines provided below. (8 marks)

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