Journal Entry

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 April 2011 Please can any one advise on the journal entry for proposed dividend at the time of closure of books and then declaration of Final Dividend and payment thereof.

Should it be as below:

At the time of closure of books

Profit & Loss A/c Dr.
To Proposed Dividend (liablity)

On the date of AGM when final dividend declared

Proposed Dividend Dr.
To Final Dividend Payable

At the time of payment

Final Dividend Payable A/c Dr.
To Shareholders A/c

Shareholders A/c Dr.
To Bank A/c

Thanks in advance.

Mandar

Mandar (Expert)
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28 April 2011 Boss

How can you debit P&L account... :(
Your first entry will be

Proposed Dividend A/c Dr
To Provision for Dividend A/c ( liability)

On Declaration
reverse the above entry, pass the remaining entries mentioned above.

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2011 Many Thanks for your response Sir

Please can you advise on the journal entry for transferring amount to General Reserve.

Will it be as below:

P&L Appropriation A/c Dr.
To General Reserve A/c

Thanks in advance

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