Question 1 The following balances are extracted from the financial statements of Richards Ltd, a Hong. Kong company, for the year ended 31 December 2014 Ordinary shares (500,0o0 shares) so.1 preference shares (8o,oo0 shares) Revaluation surplus Retained profits 700,000 80,000 160,000 250,000 On 1 January 2015 Richards Ltd issued 20,000 ordinary shares at $3 per share to help finance the buy-back of all the preference shares at a price of $i per share. 00 xI The profit of Richards Ltd for the year ended 31 December 2015 amounts to $96,000, before accounting for the matters below 1. Goods sold, costing $50,000 by mistake included in the inventory at 31 December 2014. declared a final dividend of $o.4 per share for 2015 on 4 March $100,000/ and $5o,oo0 respectively. The debentures were clastfied as fair value (2. A final dividend of $o.20 per share for 2014 was paid on April 2015. The directors 3. shares as investments for profit or loss, while the shares are classified as fair value th er income. The market prices of the debentures and shares are 0 and $65.000frespectively. During the year, Richards received interest of $4,000a re 1 dividend of $3.000, Richards Ltd has early adopted HKFRS 9 Financial Instruments. 4. Richards Ltd revalued its building, with an estimated remaining life of 40 years, on 31 Required (Ignore taxation): crAp? In accordance with relevant legal and accounting regulations (a) revise the Richards Ltd's profit for the year ended 31 December 2015, andh (b) December 2014 resulting in the above $160,000 revaluation surplus. dled un 1%. in 15, an hore (5 marks) prepare Richards Ltd's statement of changes in equity for the year ended 31 December (15 marks) 2015