4. Burgundy Ltd started trading on 1 January 2021. The income statement and statement of financial position for the first year of trading are given as follows: Income statement for the year ended 31 December 2021 Revenue 24,300,000 Cost of sales Opening inventory 1,350,000 Purchases 16,200,000 Closing inventory (1,620,000) (15,930,000) Gross profit 8,370,000 Depreciation Other expenses Profit for the year (756,000) (2,700,000) 4,914,000 Statement of financial position as at 31 December 2021 Non-current assets - net book 10,314,000 value Inventory 1,620,000 Cash 37,260,000 Total assets 49,194,000 Share capital (1 shares) 27,000,000 Retained earnings 4,914,000 Payables 17,280,000 Equity and liabilities 49,194,000 The price change indices for the year were identified as follows: RPI Non-current Inventory assets 1 January 2021 180 150 120 Average 2021 195 165 135 20 November 2021 210 190 165 31 December 2021 225 200 170 Closing inventory was acquired on 20 November 2021. The non-current-assets were acquired on 1 January 2021. Opening inventory was acquired on the first day of trading. Sales, purchases and other expenses accrue evenly throughout the year. A full year's depreciation is charged in the year of purchase for non current assets. Required: (a) Explain financial capital maintenance and physical (operating) capital maintenance and identify where holding gains are recorded under these capital maintenance concepts. (4 marks) (b) Prepare the current value (replacement cost) statement of financial position as at 31 December 2021 and the current value (replacement cost) income statement for the year ending 31 December 2021 for Burgundy Ltd. (12 marks) (c) Discuss two advantages and two disadvantages of current value (replacement cost) accounting. (4 marks) Total 20 marks