Libra Ltd continued to be successful and the statement of financial position as at 31 December 2021 reflected the following: LIBRA LTD STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021

ASSETS Non-current assets 1 600 000 Property, plant and equipment 1 400 000 Fixed deposit (6%) 200 000 Current assets 2 900 000 Inventories 1 700 000 Accounts receivable/Debtors 1 000 000 Cash 200 000 Total 4 500 000

EQUITY AND LIABILITIES Equity ? Ordinary share capital 1 800 000 Retained earnings ?

Non-current liabilities 650 000 Long-term loan (18%) 650 000

Current liabilities 800 000 Accounts payable/Creditors 600 000 Dividends payable 200 000 Total 4 500 000

NOTES: 1. Property, plant and equipment comprised the following: Vehicles Equipment Cost 1 400 000 2 800 000 Accumulated depreciation (200 000) (2 600 000)

2. The Accounts receivable balance was R600 000 on 31 December 2020. 3. The Retained earnings balance as at 31 December 2020 was R500 000. Apart from the retained earnings for the year ended 31 December 2021, there were no other transactions that affected retained earnings.

2.1. How much of the profit after tax was retained by Libra Ltd for the year ended 31 December 2021? (4 marks) 2.2. Libra Ltd made an application to a new supplier, Senzo Manufacturers, to purchase goods on credit. Should Senzo Ltd approve the application? Motivate your answer with the use of TWO (2) relevant ratios (expressed to two decimal places). (5 marks) 2.3. Comment and make recommendations regarding the following. No ratios are required.

2.3.1. Property, plant and equipment R1 400 000 (4 marks) 2.3.2. Fixed deposit R200 000 (4 marks) 2.3.3. Inventories R1 700 000 (4 marks) 2.3.4. Accounts receivable R1 000 000 (4 marks)