3. Al-Busthan corporation has a year end of 31 December. The company has in issue 400,000...

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3. Al-Busthan corporation has a year end of 31 December. The company has in issue 400,000 Ordinary shares and 15,000, 6% cumulative redeemable preference shares of OMR 10 each. On 1 July 2020, the directors declared an interim dividend of OMR20,000. On 31 December 2020, the directors proposed a final dividend of OMR 25,000. On 1 Feb 2021, at the annual general meeting they proposed final dividend for 2020 which was approved. All the dividends whether equity or preference were paid on 1 Mar 2021. Note that there are no dividend in arrears with regards to preferred stock. You are required to pass necessary journal entries and comment on how such items will effects the items of Income statement and Balance sheet 3. Al-Busthan corporation has a year end of 31 December. The company has in issue 400,000 Ordinary shares and 15,000, 6% cumulative redeemable preference shares of OMR 10 each. On 1 July 2020, the directors declared an interim dividend of OMR20,000. On 31 December 2020, the directors proposed a final dividend of OMR 25,000. On 1 Feb 2021, at the annual general meeting they proposed final dividend for 2020 which was approved. All the dividends whether equity or preference were paid on 1 Mar 2021. Note that there are no dividend in arrears with regards to preferred stock. You are required to pass necessary journal entries and comment on how such items will effects the items of Income statement and Balance sheet

Answer rating: 100% (QA)

Journal entries and effects Date Debit Credit Effect on balancesheet and OMR OMR income statement To ... View the full answer