The following information relating to the year ending 30 June 2019 for Megathink Ltd has been obtained from the company’s records.

General reserve Goodwill Income tax expense Interim dividends paid Profit for year before further adjustments and income tax Retained earnings (1/7/18) Revaluation surplus Share capital — 50 000 ordinary shares issued at $1

$

6 000 10 000 48 000 20 000 175 000 20 000 20 000 50 000

There were no shares issued during the year. The revaluation surplus related only to a block of land that had been previously revalued to a fair value of $120 000 from a cost of $100 000. It is now fair valued at $70 000.

On 30 June 2019, the directors decided to:

1. declare a final dividend payment of 8c per share — this dividend does not have to be ratified by the annual meeting

2. write-off goodwill

3. increase general reserve by $10 000.

Required

A. Record the above adjustments in the general journal.

B. Prepare a statement of changes in equity complying with IAS 1/AASB 101 (ignore comparatives).