Question No 02 Chapter No 14 - USHA Publication 11 Class

Question No 02 Chapter No 14

Table of Contents

The solution of Question No 02 Chapter No 14: –

Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution

2. The paid up capital of the company id Rs 5,00,000. the profits earned during the current year were only Rs 40,000. for previous many years, company is declaring a uniform dividend @12% on capital and it is decided to continue the same practice this year also. The balance id Dividend Equalization reserve at the beginning of the year i.e. 1.4.2017 was Rs 1,60,000.
Give entries to record the above and show necessary accounts.

The solution of Question No 02 Chapter No 14: –

In the Books of SS Limited
Date	Particulars		L.F.	Debit	Credit
2018
Mar. 31	Profit/Loss A/c	Dr.		40,000
	Dividend Equalisation Reserve A/c	Dr.		20,000
	To Dividend Payable A/c				60,000
	(Being dividend equalization reserve transferred to divided payable A/c.)

Mar. 31	Dividend Payable A/c	Dr.		60,000
	To Bank A/c				60,000
	(Being dividend paid 12@ of capital.)

Dr.	Dividend equalization Reserve A/c						Cr.
Dat	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
31/03/18	To Dividend Payable A/c		20,000	01/04/17	By Machinery Disposal A/c		1,60,000
31/03/18	By Balance C/d		1,40,000
			1,60,000				1,60,000

Dr.	Dividend Payable A/c						Cr.
Dat	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
				01/04/17	By Profit/Loss A/c		40,000
31/03/18	To Bank A/c		60,000	01/04/17	By Dividend Equalisation Reserve A/c		20,000
			60,000				60,000