The trial balance of HV Limited at 31 March 2021 was as follows. HV Limited Trial Balance at 31 March 2021 Debit Credit $ Revenue $ 145 000 Inventory at 1 April 2020 Purchases Rent and insurance Wages Operating expenses Fittings at cost Provision for depreciation of fittings Trade receivables Bank Trade payables 4% Debentures (repayable 1 April 2031) Ordinary share capital Retained earnings Dividend paid on ordinary shares 5820 64900 9280 24750 8500 200000 72000 12500 13765 6615 30000 70000 21500 5600 345 115 345 115 Additional information 1 Inventory at 31 March 2021 was valued at $6090. 2 Depreciation on fittings is to be charged at 20% per annum using the reducing balance method. 3 Rent includes a payment of $1800 for the 3 months from 1 March 2021 to 31 May 2021. 4 Accrued wages at 31 March 2021 were $2250. 5 No debenture interest has been paid for the year ended 31 March 2021. 6 No dividends were outstanding at 31 March 2021. 7 $2000 is to be transferred to a general reserve on 31 March 2021.

1. (a)Prepare the income statement for HV Limited for the year ended 31 March 2021.[8]
2. (b)Prepare the statement of changes in equity for HV Limited for the year ended 31 March 2021.[5]
3. (c)Calculate the return on capital employed for the year ended 31 March 2021. The answer should be correct to two decimal places.[3]
4. (d)State two differences between ordinary shares and preference shares.[4]