Homework question You are the newly appointed auditor of "Breekweg Ltd" and have been presented with this statement of financial position: ASSETS Notes 2021 Non-current assets 1,305,000 Property, plant and equipment 5 950,000 Long-term loans to employees 15,000 Investment/ Financial assets G 340,000 Current assets 685,000 Inventories Accounts receivable Taxation 320,000 260,000 55,000 Cash and cash equivalents 5,000 Sundry expenditure: Preliminary expenses 12,000 Ordinary share issue expenses 10,000 Preference share issue expenses 9,000 Underwriters' commission on preference shares 14.000 TOTAL ASSETS 1.990.000 EQUITY AND LIABILITIES Capital and reserves 1,562,000 Ordinary share capital and share premium 1,030,000 Retained earnings 190,000 Non-distributable reserve 100,000 Preference share capital and share premium 2 242,000 Non-current liabilities 58,000 Mortgage debentures Current liabilities 58,000 370,000 Bank overdraft Accounts payable Shareholders for dividends TOTAL EQUITY AND LIABILITIES 35,000 255,000 80,000 1.990.000 Breekweg Ltd NOTES TO THE FINANCIAL STATEMENTS OF 30 SEPTEMBER 2021 1. Accounting policies Property, plant and equipment Land and buildings are valued at cost and land is not depreciated. Buildings are depreciated over the useful life on the straight-line method. Plant machinery and vehicles are valued at cost and are depreciated on the reducing balance method to their residual value over the expected useful lives of the assets. Inventory Inventory is valued at the lower of cost and net realisable value on a FIFO basis. 2. Share capital Authorised 100,000 ordinary shares @ N$2 each 80,000 redeemable cumulative preference shares @NS3 each (fixed annual dividend of 12c/share) 50,000 redeemable preference shares @ N$2.50 cach (fixed annual dividend of 14c/share) Issued 500,000 ordinary shares @N$2 each 80,000 redeemable preference shares @ N$3 each (fixed annual dividend of 12c/share) 1,000,000 240,000 1.240.000 The redeemable cumulative preference shares are redeemable at the option of the company from 1 December 20x6 at a premium of 30c/share