The shareholders equity section of Journal Limited is reproduced below.

1. 1 Provide two plausible reasons for the reduction in retained profits between 2018 and 2019.

2. 2 List three examples of what could be included in reserves.

3. 3 Give possible reasons for the change in share capital.

4. 4 The manager of Journal Limited is contemplating a bonus issue. What impact would a bonus issue ($100 000) have on total shareholders equity?

Answer your question in full and show full working.

2019 $ 2018 $ Share capital 1 400 000 1 300 000 Reserves 150 000 200 000 250 000 350 000 Retained profits Total shareholders' equity 1 800 000 1 850 000