Neco Model Questions Vol1 2017 Financial Accounting Question 11
Practice objective / multiple choice question 11 from the 2017 Neco Model Questions Vol1 Financial Accounting examination.
A company has issued 10,000 ordinary shares at \(\text{₦}50\) each and 2,000 preference shares at \(\text{₦}100\) each carrying a 10 % cumulative dividend. During the year the reported profit before tax is \(1,200,000\). Tax is charged at 30 % of profit before tax. It is later discovered that depreciation was understated by \(80,000\). The company also has unadjusted retained earnings of \(150,000\) from the prior year. The board declares a final ordinary dividend of \(5\) per ordinary share and pays the full preference dividend. Determine the amount of profit available for ordinary shareholders after all adjustments and dividends.
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This is Neco Model Questions Vol1 2017 Financial Accounting Question 11. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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