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

question 6

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 Fty Ltd
Statement of Financial Position (extract) as at 30 June 2014
Shareholders'equity
Share Capital -
$\begin{array} { l r } 60,000 \text { ordinary shares sold for } \$ 10 \text { each } & \$ 600,000 \\ \text { Retained profits } & 20,000 \\ \text { General reserve } & 12,000 \\ \text { Asset revaluation reserve } & 180,000 \\ \text { Total equity } & \$ 812,000 \end{array}$
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:

Unconscionability

A legal principle related to contracts that are so one-sided or unfair to one of the parties that they are considered voidable.

Unconscionability

A contract term that is so unjust or overwhelmingly one-sided in favor of the party who has the superior bargaining power.

Contract Negotiating Procedures

The systematic steps and methods used during the process of reaching an agreement on contractual terms.

Auction With Reserve

A type of auction in which the seller reserves the right to accept or reject the highest bid.