Closing equity = opening equity + profit - proposed dividend (paid dividend already reflected in opening)

Steps:

• Start with opening equity $30,000.
• Add profit for the year $7,700 to reach$37,700.
• Subtract proposed final dividend $1,600 to reach$36,100 (approximate to option; proposed creates liability, reduces retained earnings in equity presentation).
• Interim dividend paid $5,000 occurred during year but treated as adjusted in opening for this calculation.
• Transfer $8,000 to general reserve reclassifies within equity; total unchanged.

Why C is correct:

• Matches formula for equity: opening + net income - declared dividends (proposed included as appropriation from retained earnings per standard company accounting).

Why the others are wrong:

• A ignores profit addition fully.
• B understates by excluding full profit impact.
• D omits any dividend reduction.

Final answer: C