South Africa Corporation has been in the business of delivering small packages for local companies within the City of Tshwane, since the year 2000. The following information concerning financial activities during 2022 is available as at 31 December 2022:

Delivery revenue R380,000 Salary and wage expense R82,000

Dividends declared and paid 85,000 Rent expense 43,000

Buildings 140,000 Land 60,000

Accounts Receivables 40,000 Accounts Payable 30,000

Capital stock 105,000 Retained earnings, 1 January 2022 42,000

Water, gas, and Electricity 28,000 Notes payable 34,000

Cash 56,000 Income tax expense 18,000

1. Prepare an income statement for the year ended 31 December 2022.

2. If you were a bank loan officer and South Africa Corporation wanted to borrow R100,000 from your bank, would you lend the money? Explain.

3. Calculate retained earnings at 31 December 2022.