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Suppose equity shares 5,000 are purchases on 1/4/21..and a rights issue has been subscribed by us ..say 800 shares on say 30/6/21 ..now If company declares dividend on 30/7/21 for yr ended 31/3/21,and dividend is at 15%,then what is the amount to be credited to investment account and why? The face value of shares are 10rs I think it should be dividend on both share purchased in beginning as well as rights issue as such dividend is received,not earned ..however in the material,they have only shown div on purchased shares on credit side of investment account ..pls let me know what is the correct answer
Answers (14)
Shankari C
It is because dividend will be paid only on shares which existed during the year end. Incase of rights issue , allotment is carried in current year only(ie..no share capital on this part in previous year)
So what will be the amount of div credited to investment account in this case ??
Shankari C
It is because dividend will be paid only on shares which existed during the year end. Incase of rights issue , allotment is carried in current year only(ie..no share capital on this part in previous year)
As per your logic,we should treat both dividend on purchases made in current year,and rights issue as recieved but not earned and credit it right ?
Shankari C
Dividend will be received only on the shares we purchase on the last year for which dividend declared. Not on the shares which is acquired in current year
Then why are we crediting investment account with div on shares purchased in n the current year?
Thread Starter
SANSKRITI BADRI 2111339Then why are we crediting investment account with div on shares purchased in n the current year?
It was there with the company last year.. Here MAIN POINT IS..was the shares part of share capital during the last year. Right shares formed part of share capital on this year only..so for this dividend will be on next year... that's why
