Question 1 The Shine Properties Ltd has found itself in financial difficulty. The following is the trial balance as at 31 December 2022 extracted from the books of the company. Other information During the meeting of shareholders and directors, it was decided to carry out a scheme of internal reconstruction. The following scheme has been agreed: i. The ordinary share capital to be reduced by 75%, such ordinary shareholders accepted a reduction of ordinary share capital and subscribed for a new issue of $60,000 ordinary share capital. ii. The existing 5% preference share capital to be exchanged for new issue of 8% preference share capital at $35,000 and ordinary share capital at $35,000 iii. The debenture holders are to accept $5,000 ordinary shares in lieu of interest payable; the interest rate is to be increased to 9.5%; a further $9,000 of this 9.5% debenture is to be issued at 90% of value of the debenture. iv. $6,000 of director's loan is to be cancelled; the balance is to be settled by issue of $10,000 ordinary shares. v. Goodwill and debit balance on retained earnings are to be written off. vi. The investment in listed shares is to be sold at current market price of $60,000. vii. The bank overdraft is to be repaid. viii. $46,000 is to be paid to trade creditors. ix. 10% of trade receivables are to be written off. x. The remaining assets were professionally valued and should be included in the books and accounts as follows: Required a. Show the necessary journal entries, including cash, to carry out the reconstruction scheme. (30 marks) b. Prepare the statement of financial position immediately after the reconstruction (15 marks)