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Question 5 The accountant from a small company is struggling to produce the Equity Section for Marvel Limited for the year ended 31 December 2021.

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Question 5 The accountant from a small company is struggling to produce the Equity Section for Marvel Limited for the year ended 31 December 2021. He has heard that he needs to set out something called a Statement of Changes in Equity in order to present more information of the figures that would go into the Equity section of the Statement of Financial Position The extract he has from the year ended 31 December 2020 Statement of Financial Position (SOFP) for Marvel Limited is as follows: 2020 E Equity Share Capital 15,000 Revaluation Reserve 1,000 Retained Earnings 30,000 Total Equity 46,000 Further Information 1 During the year ended 2021, 10,000 shares with a nominal value of 1 were issued for 2.50 per share 2. During the year ended 2021, the value of the land in the Non-Current Asset section of the company's SOFP went up from 30,000 to 33,000. No land was acquired, disposed or depreciated in the year. It is the company's policy to reflect the revalued figures in its accounts. 3. The profit after interest and tax for the year ended 31 December 2021 for the company was 25,000 4. The dividend proposed and accrued und. Current Liabilities' in the SOFP for the year ended 31 December 2021 was 5,000. The dividend paid during the year, all relating to the amount accrued in the SOFP for the year ended 31 December 2020, was 3,000. There were no interim dividends proposed and paid in the year. Required a) Draw out a Statement of Changes in Equity showing how the figures in the extract above reconcile to the closing figures that would go into the Equity section of Marvel Limited for the year ended 31 December 2021. (7 marks) b) What information would a user of the accounts be able to obtain from the Statement of Changes in Equity above? (3 marks) (Marks will only be awarded for answers that relate to the information and figures from this particular question. No marks will be awarded for general discussions about the Statement of Changes in Equity.) Total 10 marks

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