Task 4 Another assistant is in the process of finalising the financial statements of Altoclef for the year ended 31 December 20X3 and has approached you for advice on the following issues: a) On 1 January 20X3 Altoclef plc began operating a wind farm. The license for the site required that the wind farm was decommissioned at the end of its 10 year life and the site restored. At 1 January 20X3, engineering consultants estimated that the decommissioning cost would be 1,629,000. The appropriate discount rate for calculations is 5%. 6 marks b) During December 20X8 the directors decided to sell a wind farm. The company needed to raise cash so was aiming for a quick sale. The site is being marketed at below market value. However, before a sale can be negotiated, the transfer needs a Certificate of Approval from the government's Department of Energy. 8 marks c) On the 14 November 20X3 Altoclef plc accrued 12,000 of income. This particular type of income is taxed when the cash is received. The receipt was due on the 14 February 20X4. On the 31 December 20X3 Altoclef plc revalued a piece of freehold land, producing a gain of 100,000. Tax legislation only taxes the gain when the asset is sold. The revaluation has been correctly reflected in the financial statements but no further entries have been made. Altoclef plc pays tax at a rate of 20%. 4 marks Requirement For each of the issues a) and b), explain to your assistant the treatment in the financial statements for the year ended 31 December 20X3, showing any calculations necessary. For issue c) provide the necessary ledger accounting entries, but no explanation is required