1. (E10.3) On 31 October the equity section of Sanders Ltd's statement of financial position consists of contributed equity $600 000 and retained earnings $200 000. Sanders Ltd is considering the following two courses of action: (1) declaring a 5% share dividend on the 60 000 $10 issued ordinary shares or (2) paying a cash dividend of $0.50 per share. If the company issues shares as dividend, the shares will have a nominal value of $10 each. Required: (a) Prepare a tabular summary of the effects of the alternative actions on the company's equity, the number of issued shares, and share capital. Use the table below. (b) Comment on any assumption made and which course of action you would advise Sanders Ltd to take. Original Balances After Share Dividend After Cash Dividend Share Capital Retained Earnings Total Equity Issued Shares (no.) 3. (PSA10.4) On 1 January 2016, Jake Ltd had these equity accounts: Share Capital (50 000 shares issued for $20 each) General Reserve Retained Earnings $1 000 000 200 000 600 000 During the year, the following transactions occurred: Feb. 1 Declared an $0.80 cash dividend per share to shareholders, payable on 1 March. Mar. 1 Paid the dividend declared in February. July 1 Declared a 5% share dividend to shareholders, distributable on 31 July. On 1 July, the market price of the shares was $30 per share and this was determined to be the amount at which the dividend shares would be issued. July 31 Issued the shares for the share dividend. Dec. 1 Declared a cash dividend of $0.40 per share, payable on 5 January 2017. Required: (a) Journalise the transactions. (b) Enter the beginning balances and post the entries to the equity and liability T accounts. (c) Prepare the equity section of Jake Ltd's statement of financial position as at 31 December. Page 2