A-LevelAccountingPreparation of financial statements9706/12 · May/June 2012 · Q151 Mark
A company has an issued share capital of 200 000 6% cumulative preference shares of $1 each fully paid and 800 000 ordinary shares of $1 each fully paid. Assuming that the company earns no profit in the year, which statement is correct?
ABoth preference and ordinary shares are paid a dividend in the year.
BThe unpaid dividends for both preference and ordinary shares are carried forward to a future year.
CThe unpaid preference dividend is carried forward to a future year.
DThe preference shares are paid a total dividend of $12 000 in the year.
✓ Correct answer
C: The unpaid preference dividend is carried forward to a future year.
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