The shareholders' equity section of Journal Limited is reproduced below.

1. Provide two plausible reasons for the reduction in retained profits between 2015 and 2016.
2. List three examples of what could be included in reserves.
3. Give possible reasons for the change in share capital.
4. The manager of Journal Limited is contemplating a bonus issue. What impact would a bonus issue ($100 000) have on total shareholders' equity?

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Share capital Reserves Retained profits Total shareholders' equity 2016 $ 1400000 150000 250000 1800000 2015 $ 1 300 000 200 000 350 000 1850 000