This scenario relates to two requirements

You work in a small accounting practice and two of your mam ellents are Bumar Gor and Seuther Co$.$

Burner Co

The following financial information, relating to Bumer Co$,$ has been produced

Burner Co

Trial balance $($extracts$)$ as at $30$ November $20$X$9$

$$\text{'}000$

Revenue

$325,800$

Cost of sales

$247,900$

Distribution costs

$18,000$

Administrative expenses

$39,500$

Finance costs $-$ loan interest

$1,000$

Finance costs $-$ bank charges and interest

$150$

Land and buildings $-$ cost

$48,000$

Equipment $-$ cost

$32,700$

Edit F

$11$

Buildings $-$ accumulated depreciation at $1$ December $20$X$8$

$4,250$

Equipment $-$ accumulated depreciation at $1$ December $20$X$8$

$14,700$

Convertible loan notes

$20,000$

Deferred tax liability as at $1$ December $20$X$8$

$6,700$

The following notes are relevant:

$(1)$ Revenue includes an amount of $$10\mathrm{.}5$m which was received on $1$ December $20$X$8$ for the sale of a sole product, inclusive of a five$-$year maintenance agreement. The stand$-$alone selling prices would be $$10$m for the sole product and $$2\mathrm{.}5$m for a five$-$year maintenance agreement. The time value of money is not material for this transactSymbol

$(2)$ On $1$ December $20$x$8.$ Burner Co issued $200,000-$$$1000$ convertible touh poles. The toan hol may be converted to equity shares in three years lime at the rate of $30$ shanks for each $$100$ loan note. The market rate for an equivalent loan without conversion rights is $0\%$

The time value of money is material and the relevant present values of $51$ at the end of each year, based on discount rates of $5\%$ and $8\%$ are.

$5\%$

$($b$)$ Prepa ended $3$

Edit

elp

End of year $1$

$0,952$

$0\mathrm{.}926$

End of year $2$

$0\mathrm{.}907$

$0\mathrm{.}857$

End of year $3$

$0\mathrm{.}864$

$8\%$

$0\mathrm{.}794$

$(3)$ On $1$ December $20$X$8,$ the use of a building with a carrying amount of $$2\mathrm{.}8$m was changed from being owner$-$occupied to rented to a third party. The building had cost $$4\mathrm{.}4$m$.$

At $1$ December $20$X$8,$ the building was estimated to have a fair value of $$6\mathrm{.}5$m$.$ At $30$ November $20$X$9,$ the fair value was estimated at $$6\mathrm{.}85$m$.$

Burner Co intends to use the fair value model in accordance with IAS $40$ Investment Properties. No adjustments have been made to reflect this change of use. Ignore any deferred tax implications of this change of use.

$(4)$ Land at cost of $$14$m is included in land and buildings. Depreciation should be included in cost of sales and the accounting policy is as follows:

$$ buildings at $2\%$ per annum, straight line

$$ equipment at $35\%$ per annum, diminishing balance

$(5)$ The directors estimate the current tax payable at $30$ November $20$X$9$ at $$3\mathrm{.}7$m$.$

At $30$ November $20$X$9,$ Burner Co had taxable temporary differences of $$35\mathrm{.}6$m$.$ The income taxion.