QUESTION 2 (35 marks)(42 minutes) The following information pertains to Riksha Limited for the financial year ended 31 March 2020: 1. Balances as at 31 March 2020 R Ordinary share capital 500 000 6,5% Preference share capital 30 000 Share premium 52 800 Long-term loan. 72 000 Land and buildings at cost 500 000 Vehicles at cost 108 000 Furniture and equipment at cost 60 000 Accumulated depreciation: Vehicles (1 April 2019) 32 400 Accumulated depreciation: Furniture and equipment (1 April 2019) 8700 Fixed deposit: DA Bank 36 000 Prepaid expenses 1 441 Debtors control 64 000 Creditors control.. 60 880 Inventory 104 600 Allowance for credit losses 4 225 Bank (dr) 11 584 Retained earnings (1 April 2019) 5930 SARS: income tax (dr). 15 000 Profit or loss account (profit before taking any applicable additional information into account) 133 690 Additional information: 2.1 Riksha Limited was incorporated on 1 April 2017 with an authorised share capital of 60 000 PV ordinary shares of R10 each and 5 000 6,5% PV preference shares of R10 each. The company issued 75% of the recorded ordinary share capital during its first financial year, and the other 25% on 1 August 2019. The preference share capital was issued during the previous financial year. The following must still be provided for: - Depreciation on vehicles at 30% per annum on cost price - Depreciation on furniture and equipment at 20% per annum according to the diminishing balance method A final dividend on the preference shares A final dividend of 25 cents per ordinary share The estimated SA normal company income tax for the year, R25 145 Interest on the long-term loan for the last 2 months of the financial year Interest on the fixed deposit 2.3 The long-term loan was obtained from Sharp Bank on 1 April 2018 at 12% interest per annum. Fifty percent (50%) of the capital amount of the loan must be repaid on 1 April 2020, and the remaining balance on 1 April 2022. The loan is secured by a mortgage over the land and buildings. 2.4 The fixed deposit was made on 1 April 2019 at DA Bank at 8.5% interest per annum for a period of 3 years 2. 2.2 2.2 REQUIRED 2.1 Calculate the retained earnings of Riksha Limited as at 31 March 2020. (7%) Prepare the statement of financial position of Riksha Limited as at 31 March 2020 comply with the requirements of the Companies Act, No 71 of 2008, as amended, the Companies Regulations of 2011, and the IFRSs (comparative figures are not required). (21) 2.3 Prepare the note on property, plant and equipment of Riksha Limited for the year ended 31 March 2020 to comply with the requirements of the Companies Act, No 71 of 2008, as amended, the Companies Regulations of 2011, and the IFRSs (comparative figures are not required). (6%) [35]