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).

Read more at the ATO Website

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 -

Related Article:

How to use the Share Register & Franking Account

Accounting and Tax Facts for Dividends