E10.7 Speedy Deliveries Ltd had the following equity accounts at 1 January 2015:

Share capital (30 000 shares) $150 000

Dividend equalisation reserve $10 000

Retained earnings $34 000

During the year ended 31 December 2015, the following occurred:

1. A profit of $20 000 was generated.

2. $5000 was transferred to the dividend equalisation reserve.

3. An interim dividend of 15c per share was declared and paid.

4. A final dividend of 10c per share was declared.

Required

Prepare a statement of the changes in retained earnings.