1. The financial statements of Starnight Ltd (Starnight) showed a total equity balance of $2 500 000 for the reporting period ended 31 December 20X4. During the 20X5 financial year, Starnight recognised the following transactions:
   • Factory buildings were revalued from their carrying amount of $500 000 to $750 000;
   • A dividend of $50 000, which was declared in the previous financial year, was paid to shareholders on 31 March 20X5;
   • A dividend for the current financial year of $75 000 was declared on 15 December 20X5. The $75 000 is unpaid and has been recognised as a liability at the end of the reporting period;
   • The entity made a profit after-tax of $350 000.

What is the closing balance of the total equity for the year ended 31 December 20X5?

1. $2 775 000
2. $2 975 000
3. $3 025 000
4. $3 050 000