Dividends, share issues, share buybacks, options and movements in reserves    LO6, 7, 8, 9 Chilli Crab Ltd, a company whose principal interests were in the manufacture of fine leather shoes and handbags, was formed on 1 January 2017. Prior to the 2020 period, Chilli Crab Ltd had issued 110 000 ordinary shares: • 95 000 $30 shares were issued for cash on 1 January 2017 • 5000 shares were exchanged on 1 February 2018 for a patent that had a fair value at date of exchange of $240 000 • 10 000 shares were issued on 13 November 2019 for $50 per share. At 1 January 2020, Chilli Crab Ltd had a balance in its retained earnings account of $750 000, while the general reserve and the asset revaluation surplus had balances of $240 000 and $180 000 respectively. The purpose of the general reserve is to reflect the need for the company to regularly replace certain of the shoe‐making machinery to reflect technological changes. Share issue costs amount to 10% of the worth of any share issue. Required 1. Prepare the general journal entries to record the following transactions, which occurred during the 2020 financial year. Feb. 15 Chilli Crab Ltd paid a $25 000 dividend that had been declared in December 2019. Liabilities for dividends are recognised when they are declared by the company. May 10 10 000 shares at $55 per share were offered to the general public. These were fully subscribed and issued on 20 June 2020. On the same date, another 15 000 shares were placed with major investors at $55 per share. June 25 The company paid a $20 000 interim dividend. 30 The company revalued land by $30 000, increasing the asset revaluation surplus by $21 000 and the deferred tax liability by $9000. July 1 A change in the accounting standard related to insurance became effective, meaning the transitional liability was $55 000 more than the liability recognised under the previous version of the standard. This amount was recognised in other comprehensive income and accumulated in retained earnings. 22 Chilli Crab Ltd repurchased 5000 shares on the open market for $56 per share. The repurchase was accounted for by writing down share capital and retained earnings by an equal amount. Nov. 16 Chilli Crab Ltd declared a 1‐for‐10 bonus issue to shareholders on record at 1 October 2020. The whole of the general reserve was used to create this bonus issue. Dec. 1 The company issued 100 000 options at 20c each, each option entitling the holder to acquire an ordinary share in Chilli Crab Ltd at a price of $60 per share, the options to be exercised by 31 December 2021. No options had been exercised by 31 December 2020. 31 Chilli Crab Ltd calculated that its profit for the 2020 year was $150 000. It declared a $30 000 final dividend, transferred $40 000 to the general reserve, and transferred $30 000 from the asset revaluation surplus to retained earnings. 2. Prepare the statement of changes in equity for Chilli Crab Ltd for the year ended 31 December 2020.