Trial balance of Fantasio at 31 March 2017:

The following notes are relevant:

1. The suspense account represents the corresponding credit for cash received for a fully subscribed rights issue of equity shares made on 1 January 2017. The terms of the share issue were one new share for every five held at a price of 75 cents each. The price of the company's equity shares immediately before the issue was $1.20 each.

2. Non-current assets:

To reflect a marked increase in property prices, Fantasio decided to revalue its leased property on 1 April 2016.  The directors accepted the report of an independent surveyor who valued the leased property at $36 million on that date. Fantasio has not yet recorded the revaluation. The remaining life of the leased property is eight years at the date of the revaluation. Fantasio makes an annual transfer to retained profits to reflect the realization of the revaluation surplus. In Fantasio's tax jurisdiction the revaluation does not give rise to a deferred tax liability.

On 1 April 2016, Fantasio acquired an item of plant under a lease agreement that had an implicit finance cost of 10% per annum. The lease payments in the trial balance represent an initial deposit of $2 million paid on 1 April 2016 and the first annual rental of $6 million paid on 31 March 2017. The lease agreement requires further annual payments of $6 million on 31 March each year for the next four years. The present value of lease payments and right-of-use asset were measured to be $25m on the inception of the lease contract.

Plant and equipment (other than the leased plant) is depreciated at 20% per annum using the reducing balance method.

No depreciation/amortization has yet been charged on any non-current asset for the year ended 31 March 2017. Depreciation and amortization are charged to cost of sales.

3. In March 2017, Fantasio's internal audit department discovered a fraud committed by the company's credit controller who did not return from a foreign business trip. The outcome of the fraud is that $4 million of the company's trade receivables have been stolen by the credit controller and are not recoverable. Of this amount, $1 million relates to the year ended 31 March 2016 and the remainder to the current year. Fantasio is not insured against this fraud.

4. Fantasio's income tax calculation for the year ended 31 March 2017 shows a tax refund of $2.4 million. The balance on current tax in the trial balance represents the under/over provision of the tax liability for the year ended 31 March 2016. At 31 March 2017, Fantasio had taxable temporary differences of $12 million (requiring a deferred tax liability). The income tax rate of Fantasio is 25%.