Reference no: EM133073425

Question - Roller Engineering Pte Ltd (Roller) helps build and maintain oil storage terminals and other infrastructure for firms operating in the petrochemical industry. It reported record earnings of $20 million for the year ended 31 December 2006, up a staggering 300 per cent compared with the previous year. Revenue surged 120 per cent to an all-time high of $508.4 million for the year. The group attributed the higher earnings to greater economies of scale derived from its execution of large-scale projects.

Earnings per share were 10 cents, up from 2.5 cents previously, while net asset value per share stood at 30.9 cents as at 31 October 2006, up from 22.8 cents previously. There was no change in the number of ordinary shares outstanding during the period 1 November 2004 to 30 April 2007.

Roller declared a final tax exempt one-tier dividend of 3 cents a share which was approved by its shareholders at the Annual General Meeting on 25 March 2007. Dividend payment was made on 17 April 2007. The current corporate tax rate is 20%.

Required - Prepare the necessary journal entries on 25 March 2007 and 17 April 2007 to record the transactions relating to the accrual and payment of the final dividends.