Blue Ltd’s equity at 30 June 2021 was as follows: 300 000 ordinary shares, issued at $1.80, fully paid 500 000 ordinary shares, issued at $2, called to $1.20 180 000 redeemable preference shares, issued at $1, fully paid Calls in advance (10 000 ordinary shares) Share issue costs General reserve Retained earnings $ 540 000 600 000 180 000 8 000 (9 000) 80 000 290 000 The following events occurred during the year ended 30 June 2022: 2021 July 21 The final call, due 1 September, was made on the partly paid shares. Sept. 1 All call money was received, except for that due on 24 000 shares. None of the holders of these shares had contributed to the calls in advance. Sept. 15 In accordance with the constitution, the shares on which the call was unpaid were forfeited. The company is entitled to keep any balance from forfeiture of shares. Sept 25 Following approval and declaration at the Annual General Meeting a final dividend of $150 000 was paid. This dividend had been recommended on 29 June 2021 from retained earnings. Oct. 1 The company offered ordinary shareholders 1 option (at a price of 70 cents per option) for every 5 shares held. Each option entitled the holder to buy 1 ordinary share at a price of $1.60 per share, exercisable on or before 15 April 2022. 31 80 000 options were taken up by shareholders, for which all money due was received. 2022 Jan. 3 A prospectus was issued, inviting applications for 100 000 ordinary shares at an issue price of $2, payable in full on application. The purpose of the issue was to fund the redemption of the preference shares. The issue was underwritten at a commission of $8 700. 31 The issue closed fully subscribed, with all money due having been received. Feb. 5 The 100 000 shares were allotted, and the underwriting commission was paid. 18 The directors resolved to buyback the preference shares out of the proceeds of the January share issue for $1.10 per share. There were no tax or dividend distribution issues to consider. Assume that the original amount of shares is eliminated from Share Capital, then adjustments are made from Retained Earnings. 26 Payments were made to the preference shareholders. April 15 66 000 shares were issued as a result of 66 000 options having been exercised, for which money had been received. The unexercised options lapsed. June 29 The directors recommended a final dividend of $180 000 from retained earnings. This requires approval at the next Annual General Meeting to be held in September. The net profit for the year ended 30 June 2022 was $240,000.

1. Prepare a statement of changes in equity for the year ended 30 June 2022. Base the format of this on the example given as bellow

BLUE LTD

Statement of changes in equity

for the year ended 30 June 2022

Profit for the year

Other comprehensive income

Total comprehensive income for the year

Movements in equity for the year ended 30 June 2022 were :

Share capital

Balance at 1 July 2021

Issue of 500 000 ordinary shares, issued at $2, called to $1.20

Share issue costs

Call in advance on issue of 500 000 ordinary shares, issued at $2, called to $1.20

Balance at 30 June 2022

Options

Balance at 1 July 2021

Transfer to share capital on exercise

Transfer to reverse on lapse

Balance at 30 June 2022

General reserve

Balance at 1 July 2021

Bonus issue of share

Transfer from retained earnings

Balance at 30 June 2022

Options reserve

Balance at 1 July 2021

Transfer of lapsed options

Balance at 30 June 2022

Retained earnings

Balance at 1 July 2021

Dividends declared

Dividends paid

Transfer to general reserve

Profit for the period

Balance at 30 June 2022