QUESTION 1 (31 Marks) On 30 April 2020, Emilia Lid had these balances in their records: 150 000 ordinary shares at no par value 700 000 5% Redeemable cumulative preference shares at N$2,00 each 300 000 Share premium account 45 000 Capital redemption reserve fund 50 000 Retained earnings 258 000 Bank overdraft 105 350 Preliminary expenses 15 000 Dividend Payable 15 000 Underwriters' commission (on ordinary shares) 20 000 Inventory 26 350 Property 1 450 000 Equipment 755 600 Accounts receivables 545 650 Accounts Payables 368 000 The authorised share capital of the company is: 250 000 ordinary shares at no par value. 200 000 5% redeemable cumulative preference shares @ N$2,00 each. 150 000 8% redeemable preference shares at N$2,00 each. The directors have the power to issue un-issued shares and both redeemable preference shares are redeemed at the option of the company. On 15 May 2020, at a meeting of the directors of Emilia Lid it was decided that on 01 July 2020, to redeem the 5% redeemable cumulative preference shares at a 10% premium and finance this redemption as follows: 1. A fresh issue of 100 000 8% redeemable preference shares at an issue price at N$2,25/share. This offer was over-subscribed by one and a half