how to calculate interim dividend for 6 months ending on 30th june @ 3% for the period ending on 31/12/08 and also show how it will affect the profit & loss account & balance sheet if the interim dividend on trial balance is 18000
To calculate the interim dividend for a specific period, you would need information about the company's profits and the dividend percentage. In this case, the provided information states that the dividend rate is 3% and the interim dividend on the trial balance is $18,000.
To calculate the interim dividend for the 6 months ending on 30th June, you would follow these steps:
Step 1: Determine the profits for the period ending on 31/12/08.
You would need the financial statement, such as the income statement or profit & loss account, to find the profits for the period ending on 31/12/08.
Step 2: Calculate the dividend amount.
Multiply the profits by the dividend percentage (3% or 0.03) to get the dividend amount.
Interim Dividend = Profits * Dividend Percentage
Step 3: Substitute the values in the formula.
Assuming the profits for the period ending on 31/12/08 is $X:
Interim Dividend = X * 0.03
Step 4: Calculate the interim dividend.
Substitute the value of profits (X) in the formula and calculate the interim dividend:
Interim Dividend = $X * 0.03
Finally, the balance sheet and profit & loss account are affected as follows:
- Profit & Loss Account:
The interim dividend is considered an expense and reduces the retained earnings or accumulated profits line item on the profit & loss account.
- Balance Sheet:
The reduction in retained earnings on the profit & loss account is also reflected on the balance sheet under the "Shareholders' Equity" or "Retained Earnings" section. The retained earnings figure will be decreased by the amount of the interim dividend.
Note: The provided information does not include the exact profits, so the calculation of the interim dividend amount cannot be provided accurately. You need to obtain the profits figure to calculate the interim dividend correctly.