The retained profits of Franko Ltd at the beginning of the year were $270 000 and at the end of the year $320 000.Net profit after tax for the year was $510 000.During the year,$100 000 was transferred to general reserve.The proposed final dividend at the beginning of the year was $200 000 and at the end of the year $250 000.What was the amount of interim dividend paid during the year?

Question

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The retained profits increased by $50,000 ($320,000 - $270,000). The net profit after tax was $510,000, and $100,000 was transferred to the general reserve, leaving $410,000. The proposed final dividend increased by $50,000 ($250,000 - $200,000), which means the interim dividend paid was the difference between the net profit after adjustments and the increase in retained profits and final dividend proposal, which is $110,000 ($410,000 - $50,000 - $250,000).

The Retained Profits of Franko Ltd at the Beginning of the Year