Question
AC Traders was incorporated on 01 March 2019 with an authorized share capital or 720 000 ordinary shares of R5 each and R18000 15% preference shares of R2 each.
The AC Traders issued share capital were:
480000 ordinary shares of R5 each and R18000 15% preference shares of R2 each.
The company declared a final ordinary dividend of R250 cents per share. No interim dividends were declared.
What are total dividends for the year?
Choose the correct answer :
A. R54000 000
B. R1 254 000
C. R1 200 000
D. R1 227 000
The AC Traders issued share capital were:
480000 ordinary shares of R5 each and R18000 15% preference shares of R2 each.
The company declared a final ordinary dividend of R250 cents per share. No interim dividends were declared.
What are total dividends for the year?
Choose the correct answer :
A. R54000 000
B. R1 254 000
C. R1 200 000
D. R1 227 000
Answers
GPT-4o mini
To calculate the total dividends for the year, we need to determine the ordinary dividends based on the issued ordinary shares and also consider the preference dividends.
1. **Calculate Ordinary Dividends**:
- **Number of Ordinary Shares**: 480,000
- **Ordinary Dividend per Share**: 250 cents (R2.50)
Total Ordinary Dividends = Number of Ordinary Shares × Dividend per Share
= 480,000 × R2.50
= R1,200,000
2. **Calculate Preference Dividends** (15% of the preference share capital):
- **Number of Preference Shares**: 18,000
- **Preference Share Value**: R2
- **Preference Dividend Rate**: 15%
Total Preference Share Capital = Number of Preference Shares × Value per Share
= 18,000 × R2
= R36,000
Total Preference Dividends = Preference Share Capital × Dividend Rate
= R36,000 × 15%
= R5,400
3. **Total Dividends**:
Total Dividends = Total Ordinary Dividends + Total Preference Dividends
= R1,200,000 + R5,400
= R1,205,400
Based on your options, it seems that there was a misunderstanding with the total calculation. However, based on conventional dividend calculations, the total dividends declared for AC Traders would be R1,205,400.
Since this value does not match any of the provided options exactly, it appears there might be a rounding issue or a possible typographical error in the options provided, but the best conclusion based upon correct calculations leads us to total dividends around **R1,205,400**.
None of the options correctly reflect this total. Please ensure all inputs and calculations are consistent with the provided information according to the problem guidelines.
1. **Calculate Ordinary Dividends**:
- **Number of Ordinary Shares**: 480,000
- **Ordinary Dividend per Share**: 250 cents (R2.50)
Total Ordinary Dividends = Number of Ordinary Shares × Dividend per Share
= 480,000 × R2.50
= R1,200,000
2. **Calculate Preference Dividends** (15% of the preference share capital):
- **Number of Preference Shares**: 18,000
- **Preference Share Value**: R2
- **Preference Dividend Rate**: 15%
Total Preference Share Capital = Number of Preference Shares × Value per Share
= 18,000 × R2
= R36,000
Total Preference Dividends = Preference Share Capital × Dividend Rate
= R36,000 × 15%
= R5,400
3. **Total Dividends**:
Total Dividends = Total Ordinary Dividends + Total Preference Dividends
= R1,200,000 + R5,400
= R1,205,400
Based on your options, it seems that there was a misunderstanding with the total calculation. However, based on conventional dividend calculations, the total dividends declared for AC Traders would be R1,205,400.
Since this value does not match any of the provided options exactly, it appears there might be a rounding issue or a possible typographical error in the options provided, but the best conclusion based upon correct calculations leads us to total dividends around **R1,205,400**.
None of the options correctly reflect this total. Please ensure all inputs and calculations are consistent with the provided information according to the problem guidelines.