Paper 2 · Company accounts - share capital and redemption

Green Limited has 60,000 4% redeemable preference shares of $1 each. On 30 May 2015 a full year's preference share dividend was declared and paid. Calculate the amount of the preference dividend.

Model answer

2400

Also accepted: $2,400, 2,400, $2400

Explanation: Preference dividend = 4% ×

60,000 nominal value =

2,400.

Derived from ZIMSEC Accounting Paper 2, June 2018, Q2

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