If a company has a share capital of $100,000, revenue reserves of $15,000 and retained earnings of $30,000, what is the maximum amount it can legally distribute as cash dividends?
A) $45,000
B) $30,000
C) $145,000
D) $130,000

Question

Quizplus · Accepted Answer

The maximum amount a company can legally distribute as cash dividends is the sum of its revenue reserves and retained earnings, which in this case is $15,000 + $30,000 = $45,000. Share capital is not distributed as dividends.

If a Company Has a Share Capital of $100,000, Revenue