Question : Interim dividend is added to determine_____________.
Option 1: Net profit before tax and extraordinary items
Option 2: Net profit after tax and extraordinary items
Option 3: Operating profit before change in working capital
Option 4: None of the above
Correct Answer: Net profit before tax and extraordinary items
Solution : Answer = net profit before Tax and extraordinary items Interim Dividend: It is declared (approved) by the Board and paid within seven days of it being declared. It is added to determine Net Profit before Tax and Extraordinary Items because it is an item of Financing Activity, and payment thereof is shown as an outflow of cash under Financing Activity. Hence, the correct option is 1.
Question : Adjustment for Proposed Dividend is:
Option 1: Add the previous year’s proposed dividend under net profit before tax and extraordinary items and deduct it under Financing Activity.
Option 2: Add the current year’s proposed dividend under net profit before tax and extraordinary items and deduct previous year’s proposed dividend under Financing Activity.
Option 3: Add the current year’s proposed dividend under Net Profit before Tax and Extraordinary Items and deduct current year’s proposed dividend under Financing Activity
Question : Adjustment for Proposed Dividend in Cash flow statement is :
Option 1: Add the previous year’s proposed dividend under net profit before tax and extraordinary items anddeduct it under Financing Activity.
Question : Which of the following statement is correct, with respect of Adjustment for Proposed Dividend is:
Option 1: Add previous year's proposed dividend under net profit before tax and extra-ordinary items and deduct it under investing activities.
Option 2: Add previous proposed dividend while calculating net profit before tax and extraordinary items and deduct previous year's proposed dividend under Financing Activity.
Option 3: Add current year's proposed dividend under Net Profit before Tax and Extraordinary items and deduct current year's proposed dividend under Financing Activity.
Option 4: None of the above.
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