The following was obtained from the ledger of Valediction Ltd as at 30 June 2020.

End-of-year adjustments 

1. Income tax expense of $15 400 is to be recognised. The company pays tax in one instalment annually.
2. Declare a dividend on the preference shares for the current year.
3. Declare a final dividend on ordinary shares of $3000. No ratification is required at the annual meeting.
4. Transfer $5000 from the general reserve to retained earnings.

Required

Prepare a statement of changes in equity for Valediction Ltd for the year ended 30 June 2020.

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Share capital 100 000 ordinary shares paid to 75c, but issued for $1 60 000 10% preference shares fully paid at $1 Calls in advance General reserve Retained earnings 1/7/19 Profit for year (before tax) Interim dividend paid on ordinary shares (1/1/20) $ 75.000 60 000 1000 20000 16000 55 000 8000