K Limited provided the following information.
1 Its issued ordinary share capital consists of 180 000 ordinary shares of $0.30 each.
2 On 1 October 2016:
$
General reserve 3000
Retained earnings 5700
3 The profit for the year ended 30 September 2017 was $8000.
$2000 of this was transferred to the general reserve.
An interim dividend of $5500 was paid during the year.
No dividends were proposed at the end of the year.
REQUIRED
(a) Prepare the statement of changes in equity for the year ended 30 September 2017.
(b)Advise the directors whether or not they should reduce the amount of inventory. Justify your
answer.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Statement of Changes in Equity fo... View the full answer