Here is a list of balances and totals extracted from the general ledger of Rowells Replacements Ltd at 31 December 20x3, other than share capital, reserves and dividends paid:

The post-closing trial balance as at 31 December 20x2 included these items:

Additional information:

• The authorised share capital is:

– 200 000 ordinary shares.

– 100 000 redeemable preference shares (fixed annual dividend of 8c/share).

• On 15 March 20x3, the company issued a further 26 000 ordinary shares at R2/share.

The issue was fully subscribed and the shares allotted.

• On 1 October 20x3, 39 000 of the redeemable preference shares were redeemed at a premium of 5c/share, which was written off against retained earnings, and the preference dividends due of R2 340 on these shares to the date of redemption, were paid.

• Tangible assets are depreciated annually at these rates:

• The directors have recommended to shareholders that a dividend of 20c/share be paid on the ordinary share capital at 31 December 20x3 for the year. (Ignore dividend tax.)

• The income tax expense for the year is estimated to be R53 300.

• The company has guaranteed the overdraft facilities of a company, in which it holds shares, to a limit of R5 000.

• Debenture interest paid and directors’ emoluments for the year have been charged to administration expenses.

– Directors’ emoluments are made up of R6 500 directors’ fees, R32 500 managing director’s salary, and R6 500 compensation to the past chairman for loss of office.

• On 1 November 20x3, land and buildings were valued by A. Valuer, a professional property valuer, at R91 000.

– The directors have resolved to record the property at the above value in the 20x3 financial statements.

– The property is mortgaged as security for the debenture holders.

• Share investments consist of:

• The directors signed a contract for the erection of a new warehouse costing R80 000 during October. Construction of the new building is due to start on 1 June 20x4.

– The directors also authorised the construction of a new office block in Rondebosch at the estimated cost of R150 000.

– The two projects are to be financed by a further issue of ordinary shares.

You are required to:

1. Prepare the statement of profit or loss & other comprehensive income of Rowells Replacements Ltd for the year ended 31 December 20x3.

2. Prepare the statement of financial position of Rowells Replacements Ltd as at 31 December 20x3, conforming to the Companies Act 71 of 2008 and International Financial Reporting Standards (IFRS).

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15% secured debentures @ R10 each Accounts payable Accounts receivable Administrative expenses Cash at bank Cost of sales Dividends received on shares in Y Ltd Fixtures and fittings at cost Investments Land at cost Buildings at cost Vehicles at cost Provisional tax payments Accumulated depreciation (1 January 20x3): Fixtures and fittings Vehicles Premium on redemption of preference shares Inventories at cost Revenue Selling and distribution expenses 30 000 00 41 500 00 110 500 00 104 650 00 29 900 00 ****** 585 000 00 1 300 00 58 500 00 26 000 00 40 000 00 25 000 00 23 400 00 35 100 00 ...... 13 650 00 11 700 00 1 950 00 136 500 00 910 000 00 24 310 00