(a)[10]
Prepare the income statement for the company for the year ended 31 December 2020.
(b)[4]
Explain two reasons why a company may choose a rights issue of shares instead of an issue of debentures.
(c)[4]
Calculate the amount raised by the rights issue.
(d)[5]
Prepare a statement of changes in equity for the year ended 31 December 2020.
(e)[2]
Identify two ratios that can be used to assess the liquidity of a business.
(f)[5]
Advise the directors whether they should proceed with this proposal or not. Support your answer with reasons.