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.

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Definitions:

Competitive Decisions

Choices made by businesses in response to or in anticipation of the actions of their competitors, aiming to achieve a strategic advantage.

Data Analysis

The process of examining, cleaning, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making.

Primary Data

This is data collected directly from its source for the first time, used for a specific research purpose.

Marketing Information System

A system that gathers, analyzes, and disseminates data relevant to a company’s marketing activities.