ZAQ Limited recently reported the following statement of shareholders equity in its most recent annual report. Dividends paid consisted of $25 million in common dividends and $5 million in preference dividends.

($ millions)	Common Stock	Preferred Stock	Reinvested Earnings	Accumulated Other Comprehensive Income	Total Shareholders Equity
December 31, 2015	380	50	1,200	550	2,180
Net income			750		750
Foreign currency translation loss				(40)	(40)
Other comprehensive income				20	20
Total comprehensive income			750	(20)	730
Dividends			(30)		(30)
Common stock issued	20				20
Preferred stock issued		10			10
December 31, 2016	400	60	1,920	530	2,910

Required:

(a) Reformulate the statement to show beginning and ending common shareholders equity, total net transactions with common shareholders and comprehensive income available to common shareholders. (7 marks)

(b) Calculate return on common equity for the most recent financial year. (1 mark)

(c) Gains and losses on derivative instruments used for hedging purposes are recorded either as part of net income or as part of other comprehensive income. Under what circumstances are they recorded as part of net income? Under what circumstances are they recorded as part of other comprehensive income? (5 marks)