Day: January 26, 2023

Alex plc issued 100,000 10% preference shares of £1 each on 1 April 2015 at £1.20 per share.

Dividends on the shares are payable half-yearly on 1 April and 1 October.

How much will Alex plc show for preference dividends in its cash flow statement for the year ended 31 December 2015?

Select ONE answer:

1. £5,000
2. £6,000
3. £7,500
4. £10,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct = = > 100,000 shares * 0.1 = £10,000 divide by 2 as October only payment made in this year.
2. Not correct
3. Not correct
4. Not correct

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