This scenario relates to fwo requirements. The following tral balance has been extracted from the records of Latchford Co as at 31 December 20X1: (a) Prepare a statement of adjusted profit for Latchtord Co for the year ended 31 December 201. (b) Prepare a statement of financial position for Latchford C0 as at 31 December 20x1. The following information is relevant: (1) On 1 July 20X1, Latchford Co received a $5m8% loan which was accounted for correctly at that date. The interest is payable annually in arrears. The full 55m was used to fund the construction of a new building. The cost of $5m has been correctly capitalised as part of the land and buildings above, but no other accounting entries in respect of the building or the loan have been made since that date. At 31 December 201, the building is yet to be completed and will be ready for use in early 202. (2) On 1 December 20X1, Latchford Co placed an order for an item of plant and equipment at a cost of $3m. This cost was included within the plant and equipment balance above and within trade and other payables. Due to delays from the supplier, the plant and equipment was not received until January 202. (3) Latchford Co applies the following depreciation rates to its non-current assets: - Buildings - depreciated over 20-year useful life - Plant and equipment (other than the lease in note (5)) - depreciated at 25% reducing balance (3) Latchford Co applies the following depreciation rates to its non-current assets: Buldings - depreciated over 20-year useful ite - Plant and equipment (other than the lease in note (5)) - depreciated at 25% reducing balance (4) The investments are 3% bonds that were acquired for $3.5m on 1 January 201 and which Latchford Co intends to keep until maturity. Latchford Co also incurred $0.5m in transaction costs. The bonds were capitalised at 53.5m, with the transaction costs expensed in the statement of profit or loss. The bonds are redeemabie at a premium on 31 Decemer 20X6, giving them an effective interest rate of 7%. Latchford Co received the annual payment of $105,000 on 31 December 20X1, which has been included in the draft profit for the year. (5) On 1 January 20X1, Latchford Co entered into a lease for equipment. The equipment had a useful life of five years. Under the terms of the agreement, Latchford Co will make five payments of $2.4m on 1 Jenuary each year, including 1 January 20X1. Using the implicit interest rate of 13%, the total repayments have a present value of $9.539m at 1 January 201. The $2.4m paid on 1 January 201 was expensed in the statement of profit or loss, and no other accounting entries have been made in respect of the lease or the equipment. (6) Latchford Co's tax advisors have estimated that the current tax liability at 31 December 201 is $0.68m. (T) In the financial statements for the year ended 31 December 20X1, Latchford Co planned to disclose a contingent asset of $1.2m relating to a court case. On 30 December 201, a court ruled that Latchford Co would receive $1m. No accounting adjustments have been made in respect of this