a. The following items usually appear in the final financial statements of a limited company:

i. Interim dividend;

ii. Authorized capital;

iii. General reserve;

iv. Share premium account.

Required:

An explanation of the meaning of each of the above terms.

b. The following information has been obtained from the books of Drayfuss Ltd:

Authorized capitol .....................100,0008%£1 preference shores 400,00050p equity shores

Retained earnings - I Apr 20X0...............................................................£355,000

General reserve...................................................................................£1 05,000

Issued capital 80,000 8% preference shores (fully paid) 250,000 50p equity shores (fully paid)

Profit for the year to 31 Mar 20X1..............................................................£95,000

The preference share interim dividend of 4 per cent had been paid and the final dividend of 4 per cent had been proposed by the directors. No equity share interim dividend had been declared, but the directors proposed a final dividend of 15p per share. The directors agreed to transfer £150,000 to general reserve.

Required

Prepare the statement of changes in equity for the year ended 31 March 20X1. Ignore taxation.