Which of the following statements are correct? (1) Materiality means that only items having a physical existence may be recognised as assets. (2) The substance over form convention means that the legal form of a transaction must always be shown in financial statements even if this differs from the commercial effect. (3) The money measurement concept is that only items capable of being measured in monetary terms can be recognised in financial statements. 3 only 1, 2 and 3 2 only 1 only X Ltd. had the following share capital and reserves as at 1st January 2015: 1 000 000 ordinary shares of 1 each.. ...........1 000 000 Retained profits.... ..15 000 The following are transactions relating to shareholders: (1) On 31st July 2015 X Ltd. makes a one-for-five rights issue of 1 ordinary shares to its existing shareholders at 2.50 per share. (2) Retained profits of X Ltd. for the year ended 31st December 2015 amounted to 600 000, and for the year ended 31st December 2016 amounted to 800 000. (3) On 31st December 2016 X Ltd. makes a bonus issue of one-for-two 1 ordinary shares to its existing shareholders at that date. The directors of X Ltd. wish to use as little of the retained profits as possible in respect of this bonus issue. Calculate the estimated retained profits of X's at 31st December 2016 2,900,000 2,300,000 2,600,000