Mamagau Limited acquired 50% of the voting shares of
Mashego Limited at 30 April 2015 at R160 000. The balance sheet of Mashego Limited showed the following balances at
30 April 2015:
Non-current assets
R450 000
Current assets
Non-current liabilities
Current liabilities
R120 000
R240 000
R25 000
The year-end date for Mamagau Limited is on 30 April of every year. During the year ended 30 April 2016 Mashego Limited reported an after tax profit of R120.000. The directors of Mashego Limited declared an ordinary dividend of R20 000 but not yet paid at reporting date. Mamagau Limited applies equity accounting method for its associates and joint ventures.
What is the correct journal to record the dividend declared as at 30 April 2016in the books of Mamagau Limited? Select one:
O a. Dr
000
Dividend receivable
Cr Investment in Mashego Limited
R10.000
R10
O b. Dr Investment in Mashego Limited
Cr
Bank
R20 000
R20.000
O c. Dr Dividend receivable
Cr Investment in Mashego Limited
R20 000
R20
000
• d. Dr Investment in Mashego Limited R10 000
R10 dOo
Cr Bank