Western Airline (Western) is a privately owned charter airline operating in Canada. Western has been growing since its inception in 1960. The majority of the shares are owned by the Lee family. Due to the poor economy, Western experienced financial difficulties owing to competition from Air Canada and Westjet compounded by recent COVID 19 pandemic. Despite best efforts, the Lee family has been unable to turn Western around. Effective September, 2020, the Lee family has hired a skilled airline executive, Mr. Smart to become the CEO of Western. Mr. Smart is offered a generous salary, plus a bonus based on 20% of Western's after tax net income. The Western family will let Mr. Smart manage the day to day operation and they will remain as silent owners. One of the mandates for Mr. Smart is to also ensure that Western can meet the condition from the newly created federal government program to help financially scrapped airlines for a low interest free loan and fuel subsidies. At this point in time, the Lee family does not want to lose control over the family business as they consider any financing options. It is now October15, 2021, Mr. Smart is getting ready to meet with the Lee family to review the 2020 financial results (October 1, 2020 to September 30, 2021). He has asked you, the financial advisor, to review the financial statements prepared by the company controller to make sure that the financial results are accurate. The Lee family has requested that the financial statement to be prepared using the IFRS standard. In reviewing the 2020 financial statement, you have discovered the following: 1. During 2020, the Lee family agreed to issue a class of special preferred shares to a wealthy Middle Eastern investor: The shares pay a dividend of 10% of face value, and the dividends are cumulative. The shares are retractable from 2022 at the option of the investor at a price equal to their par value. These special shares do not have voting privileges. 2. With Mr. Smart's efforts, Western signed an agreement with the Toronto Maple Leafs (Maple) in October 2020 to have their logo painted on the exterior of all its planes. The logo will remain on the aircraft for two years. As per the agreement, Maple will pay $ 1 million each month for the duration of the agreement. The first year of the agreement is guaranteed, but after that either party can elect to discontinue it. 3. In 2020, Western purchased some used equipment from a recently bankrupt competitor for $ 350,000. The equipment was old and required significant repairs and maintenance, which cost $ 150,000. Western restored the equipment to a nearly new condition and will last at least five years before being scrapped. New equipment of similar type and use would have cost $ 700,000. Western recoded the equipment at $ 350,000 and expensed the rest in their 2020 financial statement. 4. During 2020, Western was sued by a passenger who slipped on a banana peel while boarding the plane and broke her leg. It was established that a cabin attendant had accidentally left the peel there. The lawsuit was for $ 500,000. The legal counsel advised Western that the final court date would likely be in early January and the settlement would be close to $ 250,000. Nothing has yet been recorded in the financial statement. Required: Adopt the role of the financial advisor and prepare the report. Please make sure that your report should also outline the impact of the bonus that will be distributed to Mr. Smart