Question

4.
Percentage of profit transferred to statutory
reserve is
(a) 25%
(b) 20%
(c) 15%
(d) 10%​

Answer 1

Answer:

12th

Accountancy

Financial Statements of a Company

Format of Balance Sheet

When the proposed dividend ...

ACCOUNTANCY

When the proposed dividend exceeds 20% of paid up capital, percentage of profit transferred to general reserve is _______.

HARD

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ANSWER

No dividend shall be declared or paid by the company for any financial year out of the profits of the company except after the transfer to the reserves of the company a certain percentage of the profits of that financial year.

The major guidelines are as under:

1) If dividend proposed is more than 10% and less than 12.5% of the paid up capital- 2.5% of the current years profits to be transferred to reserves.

2) If dividend proposed is more than 12.5% but does not exceed 15% of the paid up capital- 5% of the current years profits to be transferred to reserves.

3) If dividend proposed is more than 15% but does not exceed 20% of the paid up capital- 7.5% of the current years profits to be transferred to reserves.

4) If dividend proposed is more than 20% - 10% of the current years profits to be transferred to reserves.