The Company makes taxable profit of $100
Pays tax at x rate
Can only pay dividends from the retained earnings i.e. the profit after tax
Can only frank the dividend with credits available at the given tax rate (not the available franking credits in the franking account).
Note: Franking credit or debit is recorded when entity pays tax or receives refund. Any amount should not be recorded if not yet paid.
Learn here - https://www.ato.gov.au/business/imputation/paying-dividends-and-other-distributions/franking-account/
How to use the Share Register & Franking Account