QUESTION TWO: FINANCIAL STATEMENTS OF A COMPANY [25 MARKS] The following list of accounts was extracted from the Trial Balance of RJ Ltd at 31 December 2020 20 Share capital - issued and fully paid: Ordinary shares 7% Redeemable preference shares Accumulated depreciation of plant and equipment(31/12/2019) Accumulated amortisation of patents and trademarks (31/12/2019) Plant and equipment at cost (31/12/2019) Land and buildings at cost Patents and trademarks at cost (31/12/2019) Investment at fair value Revenue Raw material purchased Inventory - 31 December 2019 Selling and distribution expenses Administrative expenses Proceeds on sale of plant and equipment Loss on expropriation of land Retained earings - 31 December 2019 Asset replacement reserve 31 December 2019 Dividends received - CJ Ltd Bank overdraft Trade and other payables Trade and other receivables 50 000 15 000 8 250 1 500 90 500 47 875 7 500 16 500 60 250 11 750 15 500 3800 22 200 4500 1 000 18 750 10 000 2 700 19 500 71 525 45 350 Additional information: 1. Trade and other receivables includes provisional tax payments of R7 000 2. Trade and other payables: Creditors are secured by plant to the value of R35 000 (payable within one year). Accrued interest on debentures also forms part of creditors. 3. Administrative expenses include the following: R Interest on bank overdraft 1 450 Auditors' remuneration - for audit 1 000 Managing director's salary-executive 1 500 Directors' remuneration-executive 300 Sundry salaries and wages 15 450 Rent paid 2 500 4. Property, plant and equipment Land with a cost of R15 000 was expropriated during the year. (Loss on expropriation is not tax deductible) During the year plant which had a cost of R6 000 was sold for R4 500. The depreciation provided on this plant to 31 December 2019 is R1 250. There were no other sales of plant and equipment during the year. Depreciation on plant and equipment must still be provided for the year as follows: Depreciation from beginning of year to date of disposal of plant R1 000 Depreciation on remaining plant and equipment R3 500 5. The patents and trademarks are amortised over 5 years according to the straight-line method. The amortisation charge for 2020 is R1 500 6. The following must be provided for in the current year: Current tax at 28%. It may be assumed that "selling and distribution expenses" and "administrative expenses' do not include any disallowable expenditure for income tax purposes. Annual preference dividend. Dividends declared to ordinary shareholders of R7 500 Asset replacement reserve must be increased to R20 000 7. Inventory is valued at lower of cost or net realisable value and its value at 31 December 2020 is R15 750 REQUIRED: Prepare the Statement of Comprehensive Income for BJ Ltd and the Statement of Changes in Equity for the year ended 31 December 2020. (25 marks) NB: The implications of capital gains tax, VAT and deferred tax must be ignored. Show all your workings Your answer must comply with the requirements of International Financial Reporting Standards