The pre-adjustment trial balance of XYZ Limited is presented as follows:

Description Debit Credit

Ordinary shares 200 000

7,5% preference shares 150 000

Retained earnings 147 500

Trade creditors 54 750

Plant and machinery 352 000

Motor vehicles 195 000

Office furniture 25 600

Trade debtors 42 500

Allowance for credit losses 1 650

Accumulated depreciation on plant and machinery 56 850

Accumulated depreciation on motor vehicles 34 850

Accumulated depreciation on office furniture 4 520

ABSA cheque account 98

Petty cash 3 354 Inventory 6 210 Sale of goods 656 974 Cost of sales 268 500 Water and electricity 12 500 Travelling and fuel 8 540 Motor vehicle repairs and maintenance 12 580 Telephone cost 64 850 Salaries and wages 198 500 Directors training 12 400 Cleaning and consumables 3 568 Staff welfare 1 489 Printing and stationery 980 1 307 094 1 307 094

Additional information: 1. A customer returned defective goods of R5 750. VAT of 15% is levied per the Value Added Tax Act by XYZ Limited. The company has a 10% markup rate. 2. The municipal account amounting to R1 450 was received on 14 April 2023. 3. Repairs to the motor vehicle of R 3 200 was refunded through payroll and posted to the salaries and wages account. 4. XYZ Trading adopted the periodic inventory system to account for the consumables. Consumables purchased during March 2023 of R5 000 was posted to the cost of sales account by the bookkeeper. The stock count concluded on 31 March 2023 valued the consumable inventory on R4 200. 5. Ordinary shares trades at R2 each. At reporting date, the shareholders declared a dividend of 5c. A prospectus offering 50 000 R2 ordinary shares and 10 000 R10 preference shares was advertised during March 2023. Mrs. Flinch entered into an underwriters agreement with XYZ Limited for an agreed 3,5% fee. 6. The allowance for credit losses should equal 8% of the debtors book at reporting date.

Required: 2.1 Prepare the Statement of Comprehensive Income as at 31 March 2023 based on the reporting requirements of the International Financial Reporting Standards. (25) 2.2. Define with examples where applicable each of the following accounting concepts/terms: 2.1.1 Accounting (2) 2.1.2 Current liability (3) 2.1.3 Current asset (3) 2.1.4 Net asset value (2) 2.1.5 Accounting policy (3) 2.3 Discuss the accounting cycle. (7