Q.5 On 1 January 2016, Zombies PLC decided to increase the operating capacity of plant and machinery. Due to limited liquid funds it was not able to buy the required plant and machinery which had a cost of $3,500,000. On the recommendations of the finance director. Zombies PLC entered into an agreement to lease the plant and machinery from Investrust Lease Finance. The lease required four annual payments in advance of $1,000,000 each commencing on 1 January 2016. The plant and machinery would have a useful life of four years and would have be scrapped at the end of this period. The implicit interest rate of this lease is 10% per annum The finance director, believing the lease to be an operating lease, commented that the agreement would improve the company's return on capital employed compared to outright purchase of the plant and machinery Required: a) Using the information in the case study above, prepare extracts from the statement of profit or loss and statement of financial position for the years ending 31 December 2016, 2016 and 2017