!~~~~~Shareholders’ equity The shareholders’ equity section of Journal Limited is reproduced as shown.
2022 2021 $ $
Share capital 1 400 000 1 300 000 Reserves 150 000 200 000 Retained profits 250 000 350 000 Total shareholders’ equity 1 800 000 1 850 000 1 Provide two plausible reasons for the reduction in retained profits between 2021 and 2022.
2 List three examples of what could be included in reserves.
3 Give possible reasons for the change in share capital.
4 The manager of Journal Limited is contemplating a bonus issue. What impact would a bonus issue ($100 000)
have on total shareholders’ equity?