The Shareholders Are the Owners of a Company REQUIRED:
A)Briefly Explain the Meaning of Each of the Four

question 40

Essay

The shareholders are the owners of a company. The shareholders' equity of Adventure Travel Agency Pty Ltd is set out below. (Note that all shares were issued when the company was originally set up and there have been no subsequent issues.)
Adventure Travel Agency Pty Ltd
Statement of Financial Position (extract) as at 30 June 2018
Shareholders' equity
Share Capital -
$\begin{array} { l r } 60,000 \text { ordinary shares sold for } \$ 10 \text { each } & \$ 600,000 \\ \text { Retained profits } & 20,000 \\ \text { General reserve } & 12,000 \\ \text { Asset revaluation reserve } & \underline { 180,000 } \\ \text { Total equity } & \underline { \$ 812,000 } \end{array}$
REQUIRED:
a)Briefly explain the meaning of each of the four components of shareholders' equity, giving an example of how each might have arisen.
b)Indicate which of the four components are legally available for the payments of cash dividends.

---

Definitions:

Hunger Pangs

Sensations of discomfort or weakness caused by the need for food.

Satiety

The state of being satisfied; fullness.

James And Lange

Theorists who proposed an emotion theory suggesting physiological arousal precedes the experience of emotion.

Cognitive Representations

Mental models or mental images that individuals form about objects, events, or people, based on their knowledge and experiences, which guide their interactions with the external world.