rushi (article) (125 Points)
20 June 2012Suppose I Had 100 of Rs.10 each Shares On the Date Of Signing the balance sheet i.e.31/3/2011
Directors proposed Dividend 5% amd Accordingly Transfered 50 Rs to P\L Appropriation A/C
Then in September 2011 they Converted 15 warrants alloted on preferential basis into shares
then the directors Delared Dividend on 115 Shares @ 5% and made Payment For the Same.
Is The Above Treatment Correct?How Do I Account For the Above Transactions In My Books Of Accounts
sangram ghatge
(company secretary in practice)
(198 Points)
Replied 20 June 2012
dear rushi,
the transfer of rs 50 to p&l appropriation account was wrongly calculated. conversion of warrants should have been considered while making p&l appropriation. but there is no problem in paying dividend of rs 57.5/-. excess dividend of rs. 7.5/- would be debited to p&l account of next financial year in which actual payment is done.
regds,
sangram 9422622828.
Giridhar S Karandikar
(Team Lead)
(7553 Points)
Replied 26 June 2012
Mr Sangram, as per rushi's question, the dividend proposed by directors should be for the sharesl held on Mar31. however if there is a change in the shareholding before closing the register of shareholders for the purpose of AGM after the year end, then we should consider that shareholding also. Am I right??
So I think that, if that is the case above, then only the excess dividend would had been debited to P&L.
CAclubindia
