QUESTION 3 (30 marks) (36 minutes) The following balances were extracted from the accounting records of Moshupi Ltd as at 1 January 2020. Ordinary shares. 10% Non-cumulative preference shares 8% Cumulative preference shares Retained earnings - 1 January 2020 Land Investment.. Fair value adjustment Mark-to-market reserve. R Debit (Credit) (2 400 000) (1 400 000) (900 000) (700 000) 2 000 000 300 000 (100 000) Additional information 1. Moshupi Ltd was incorporated on 1 April 2017 with an authorised share capital of 500 000 ordinary shares, 300 000 8% cumulative preference shares and 300 000 non-cumulative preference shares. Issued share capital comprises of 300 000 ordinary shares, 140 000 non-cumulative preference shares and 100 000 cumulative preference shares. 2. 60 000 ordinary shares were issued at R10 each on 5 January 2020 and 50 000 non-cumulative preference shares at R15 each on 30 June 2020. Share issue expenses amounted to R1 000 in 2. 60 000 ordinary shares were issued at R10 each on 5 January 2020 and 50 000 non-cumulative preference shares at R15 each on 30 June 2020. Share issue expenses amounted to R1 000 in respect of ordinary shares. 3. On 1 June 2020, the directors decided to make a capitalisation of one ordinary share for every five ordinary shares held at R7 each. 4. The land (was never impaired) on which both the factory and office buildings are erected was revalued for the first time on 30 June 2020 by Mrs Ceki, a sworn property appraiser to a fair value amount of R2 200 000. 5. Profit after tax for the year was correctly calculated at R200 000. 6. Investments consist of the following: 25 000 Ordinary shares in Gabangaye Ltd purchased at R4,00 per share for speculative purposes. The total issued share capital of Gabangaye Ltd consists of 250 000 ordinary shares. Each share carries one vote. These shares are traded on the JSE and the market value of the shares was R6,00 each on 31 December 2020. No transaction costs were incurred. 100 000 Ordinary shares in Sibusiso Ltd purchased at R2,00 per share. The total issued ordinary share capital of Sibusiso Ltd was 1 000 000 shares. The directors valued the shares at R5,50 each on 31 December 2020. These shares are classified as not held for trading. No transaction costs were incurred. 7. A vidend of 5c per ordinary dividend was declared to the shareholders registered on 30 December 2020. No dividends were paid in the previous financial year, 31 December 2019. QUESTION 3 (continued) REQUIRED: Marks Prepare the statement of changes in equity of Moshupi Ltd for the year ended 31 December 2020. Your answer must comply with the requirements of International Financial Reporting Standards (IFRS). 30 30 Please note: Comparative figures are not required. Show all calculations. QUESTION 3 (30 marks) (36 minutes) The following balances were extracted from the accounting records of Moshupi Ltd as at 1 January 2020. Ordinary shares. 10% Non-cumulative preference shares 8% Cumulative preference shares Retained earnings - 1 January 2020 Land Investment.. Fair value adjustment Mark-to-market reserve. R Debit (Credit) (2 400 000) (1 400 000) (900 000) (700 000) 2 000 000 300 000 (100 000) Additional information 1. Moshupi Ltd was incorporated on 1 April 2017 with an authorised share capital of 500 000 ordinary shares, 300 000 8% cumulative preference shares and 300 000 non-cumulative preference shares. Issued share capital comprises of 300 000 ordinary shares, 140 000 non-cumulative preference shares and 100 000 cumulative preference shares. 2. 60 000 ordinary shares were issued at R10 each on 5 January 2020 and 50 000 non-cumulative preference shares at R15 each on 30 June 2020. Share issue expenses amounted to R1 000 in 2. 60 000 ordinary shares were issued at R10 each on 5 January 2020 and 50 000 non-cumulative preference shares at R15 each on 30 June 2020. Share issue expenses amounted to R1 000 in respect of ordinary shares. 3. On 1 June 2020, the directors decided to make a capitalisation of one ordinary share for every five ordinary shares held at R7 each. 4. The land (was never impaired) on which both the factory and office buildings are erected was revalued for the first time on 30 June 2020 by Mrs Ceki, a sworn property appraiser to a fair value amount of R2 200 000. 5. Profit after tax for the year was correctly calculated at R200 000. 6. Investments consist of the following: 25 000 Ordinary shares in Gabangaye Ltd purchased at R4,00 per share for speculative purposes. The total issued share capital of Gabangaye Ltd consists of 250 000 ordinary shares. Each share carries one vote. These shares are traded on the JSE and the market value of the shares was R6,00 each on 31 December 2020. No transaction costs were incurred. 100 000 Ordinary shares in Sibusiso Ltd purchased at R2,00 per share. The total issued ordinary share capital of Sibusiso Ltd was 1 000 000 shares. The directors valued the shares at R5,50 each on 31 December 2020. These shares are classified as not held for trading. No transaction costs were incurred. 7. A vidend of 5c per ordinary dividend was declared to the shareholders registered on 30 December 2020. No dividends were paid in the previous financial year, 31 December 2019. QUESTION 3 (continued) REQUIRED: Marks Prepare the statement of changes in equity of Moshupi Ltd for the year ended 31 December 2020. Your answer must comply with the requirements of International Financial Reporting Standards (IFRS). 30 30 Please note: Comparative figures are not required. Show all calculations