Question

Proposed Dividend for the year ended March 31, 2025 and March 31, 2024 were ₹ 2,50,000 and ₹ 2,00,000 respectively. Shareholders finalised the dividend amount at ₹ 1,80,000 during the year ended March 31, 2025 in AGM held in June-July 2024. Unclaimed dividend as at March 31, 2025 was ₹ 10,000.

Choose the correct option while preparing Cash Flow Statement for the year ended March 31, 2025:

विकल्प

• Proposed Dividend added in Net Profit after tax will be ₹ 2,00,000 and outflow of Dividend paid in financing activities will be ₹ 1,90,000.

• Proposed Dividend added in Net Profit after tax will be ₹ 2,50,000 and outflow of Dividend paid in financing activities will be ₹ 2,00,000.

• Proposed Dividend added in Net Profit after tax will be ₹ 1,80,000 and outflow of Dividend paid in financing activities will be ₹ 1,90,000.

• Proposed Dividend added in Net Profit after tax will be ₹ 1,80,000 and outflow of Dividend paid in financing activities will be ₹ 1,70,000.

Answer 1

Proposed Dividend added in Net Profit after tax will be ₹ 1,80,000 and outflow of Dividend paid in financing activities will be ₹ 1,70,000.

Explanation:

• Dividends are added back to Net Profit only when declared, so the dividend recognised at the AGM (₹ 1,80,000) is added back.
• At year-end, ₹ 10,000 remained unclaimed, meaning only ₹ 1,70,000 (1,80,000 – 10,000) was actually paid during the year.
• Therefore, dividend paid = ₹ 1,70,000, matching the financing outflow given in Option D.