On 1 April 20X1 the Directors of Davo Ltd Resolved

question 2

Multiple Choice

On 1 April 20X1 the directors of Davo Ltd resolved to pay shareholders an interim cash dividend of $0.35 per share on 1 May 20X1.Davo Ltd's financial year end is 30 June.Davo Ltd prepares monthly accounts.At 31 March 20X1, the equity section of Davo Ltd's balance sheet is as follows:
$$\begin{array} { l r } &\$\\\text { Issued share capital (1 } 1000000 \text { shares) } & 2000000 \\\text { Retained profits } & 3800000 \\\text { Asset revaluation reserve } & 955000 \\\text { General reserve } & \underline{445000} \\\text { Total } & 7200000\end{array}$$
-Show the format of the journal entry in the accounts for the month of April 20X1

• A) \(\begin{array}{llcc}
• \text { Accounts} & \text { Debit \$} & \text { Credit \$} \\
• \text { Interim dividend } &X\\
• \text { Interim dividend payable } &&X\\
• \text { } &\\
• \text { } &\\
• \text { } &\\
• \end{array}\)
• B) \(\begin{array}{lcc}
• \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\
• \text { Interim dividend } & x & \\
• \text { Bank } & & x
• \end{array}\)
• C) \(\begin{array} { l c c }
• \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\
• \text { Interim dividend payable } & \mathrm { x } & \\
• \text { Interim dividend } & & \mathrm { x }
• \end{array}\)
• D) \(\begin{array}{lcc}
• \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\
• \text { Retained profits} & x & \\
• \text { Bank } & & x
• \end{array}\)

Learn the treatment of product costs as inventory on the balance sheet until the goods are sold.

Grasp the concept of activity-based costing and its differences from traditional costing methods.

Understand how overhead costs are allocated and the use of different factory overhead rates.

Recognize the importance of job order costing systems in evaluating company efficiency and in decision-making.

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