1 (20 Marks) REQUIRED Use the information provided below to prepare the Statement of Financial Position of Lynwood Limited as at 31 August 2023. The notes to the financial statements are not required. Show all workings. INFORMATION The following balances were obtained from the accounting records of Lynwood Limited after some of the adjustments and closing transfers were completed on 31 August 2023, the end of the financial year. R Inventory 315 000 Accounts receivable 92 000 Loan: Lindor Bank (19.5%) 200 000 Equipment (Cost) 1 980 000 Accumulated depreciation on equipment ? Cash float 13 500 Accounts payable 211 000 Provision for bad debts ? Accrued income ? Ordinary share capital 1 161 000 Retained income 540 000 Company tax payable 18 000 Bank (DR) 99 000 Accrued expenses ? Dividends payable 161 000 The following adjustments must be made: The account of a debtor who owed R2 000 must be written off. The provision for bad debts must be adjusted to 5% of debtors. The rent income account reflected a total of R99 000 which was for rent for the period 01 September 2022 to 31 July 2023. Make the necessary adjustment. Interest on loan was owed for the last four months of the financial year. Interest is not capitalised. The equipment was acquired on 01 March 2023. Depreciation must be provided at 20% per annum using the reducing balance method. QUESTION 2 (20 Marks) REQUIRED Use the information provided below to calculate the following (expressed to two decimal places): 2.1 Cost of equity using the Capital Asset Pricing Model (4 marks) 2.2 Cost of preference shares (4 marks) 2.3 Cost of debt (4 marks) 2.4 Weighted average cost of capital (using your answers from questions 2.1 to 2.3) (3 marks) 2.5 Cost of equity using the Dividend Growth Model. (5 marks) INFORMATION Kingston Limited intends raising finance for a proposed new project. The financial manager has provided the following information to determine the present cost of capital to the company: The capital structure consists of the following: 4 million ordinary shares issued at R4 each but currently trading at R6 each. 3 million 12%, R4 preference shares which incurred floatation costs of R0.16 per share. R4 000 000 15% Bank loan, due in July 2027. Additional information The companys beta coefficient is 1.5. The risk-free rate is 10%. The return on the market is 25%. A dividend growth of 10% per annum on ordinary shares was maintained over the past five years. The latest dividend paid was 150 cents per share. Assume that the company tax rate is 28%