Given:
Ordinary share dividend ₦100,000, General reserve ₦4,100, Net profit b/d ₦27,370, corporation tax ₦2,500, Profit and loss ₦28,200, Interim ordinary dividend ₦4,050, Goodwill 20,50 provide for preference Dividend ₦2100 and Final ordinary Dividend of 5% and also write off Goodwill at ₦1500.
The retained profit in the Appropriation account is
A ₦55,570
B ₦36,320
C ₦50,000
D ₦30,000
Answer is B
Ordinary share dividend = 5% × 10,000 = 5000
Retained profit = (27,370 + 28,000 – 4100 + 1500 – 4050 + 5000 + 2100 + 2500)
⇒ 55,570 – 19,250 = ₦36,320
