Task 7 is to prepare Avalon Ltd.'s (1) Statement of Earnings and the Statement of Comprehensive Income for the year ended August 31, 2023; (2) Statement of Changes in Equity for the year ended August 31, 2023; and (3) Statement of Financial Position as at August 31, 2023. 1. The Statement of Earnings and the Statement of Comprehensive Income for the year ended August 31, 2023 (Avalon presents these statements as two separate statements on consecutive pages). As Avalon is a public company, your statement of earnings will include the earnings per share disclosures that are required on the face of the statement. Avalon uses the multiple step format. The deferred income tax expense amount for the statement of earnings will have to be calculated as follows: (a) begin with the deferred income tax expense account balance then (b) remove the deferred tax effects provided below relating to the OCI items; the remainder will be the deferred income tax that relates to NI items (and therefore the statement of earnings). The tax effects for your OCI items are as follows - these are all deferred income tax items: OCI: Remeasurement gain/loss pension plan OCI: Unrealized gain/loss on FV-OCI investment OCI: Reclassification adjustment on FV-OCI investment $2,135 DR $1,125 DR $672 CR For the Statement of Comprehensive Income, your Other Comprehensive Income section will have two subsections: Items that will not be reclassified to earnings Items that are or may be subsequently reclassified to earnings Each of your three items of OCI will be listed in the appropriate section net of its tax effect (above). Review some of the recent financial statements on UR Courses for examples of the format. 2. Statement of Changes in Equity for the year ended August 31, 2023. This statement should have a column for each of the shareholders' equity line items. The first line of the statement will be the August 31, 2022 balances for each of these items. Then each item that has caused a change in any of these columns will be incorporated into the statement. The final line will be the August 31, 2023 balances and these final balances should be exactly the same amounts as your August 31, 2023 statement of financial position shareholders' equity amounts. (It should be noted that August 31, 2022 retained earnings was $1,290,040 and August 31, 2022 AOCI was $9,728.) Report the fiscal 2023 activity in contributed surplus accounts in a single column, "Contributed surplus" in your statement. The beginning contributed surplus amount will be $39,200 (which relates to the stock option plan). In fiscal 2023 two types of contributed surplus have occurred and each of these items needs to be added to the contributed surplus column of the statement of changes in equity. Students should also report the fiscal 2023 activity affecting AOCI in a single column "Accumulated other comprehensive income".