Reserves, dividends, statement of profit or loss and other comprehensive income, statement of changes in equity The equity of Papanui Ltd at 30 June 2025 was as follows.

Required

(a) Prepare general journal entries for all dated transactions in the additional information.

(b) Prepare a statement of profit or loss and other comprehensive income for the reporting period ended 30 June 2025 in accordance with current accounting standards.

(c) Prepare a statement of changes in equity for Papanui Ltd for the reporting period ended 30 June 2025.

(d) Discuss the nature and purpose of the general reserve.

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Share capital 500 000 5% cumulative shares issued at $1 each preference 1 000 000 ordinary shares issued at $2 each Total share capital General reserve $ 500 000 2 000 000 2 500 000 350 000 Retained earnings 2024 Oct. 1 Additional information 300 000 $3 150 000 During the year ended 30 June 2025, the following transactions occurred. Papanui Ltd settled a long standing civil lawsuit for $125 000 (significantly less than had been expected). The directors had previously placed $350 000 into a general reserve in anticipation of the potential costs. The board has now decided that the general reserve can be discontinued. Dec. 1 The directors had not paid the preference shareholders their dividend for 2022 given the lack of retained earnings. They now declare and pay the dividend. 2025 Feb. 1 The profits for the half year were such that the directors declare and pay 15c per share interim dividend for ordinary shareholders. June 30 The profit before tax for the year was $1 578 000. The directors decided to recommend a final dividend of 30c per share for ordinary shareholders. Assume the tax rate is 35% for estimating income tax expense. In determining the profit before tax of $1 264 000 the following items were taken into account.