The following situations have arisen affecting the financial affairs of MOP Ltd. The company's year-end was 31 December 2014. The company's financial statements were authorised by the directors for publication on 31 March 2015.

a. The company's inventory at 31 December 2014 included 420 items that cost $12 per item which would normally sell at $20 each. It has been noticed that 46 items have been damaged. Fourteen items have relatively little damage and could be sold for $14 each. The other damaged items, however, will require some expenditure in order to put then in a saleable condition. It is estimated that a total of $128 will need to be spent before these items can also be sold for $14 each.

b. The company's statement of financial position at 31 December 2014 included a trade receivable who owed the company $7200. On 24 February 2014 the company was notified that the trade receivable had been declared bankrupt and would not be able to pay any of the amount due.

c. In November 2014 the company was sued by a customer. The court case has yet to be decided, but the company's legal adviser has warned that it is probable that the company will lose the case and damages are reliably estimated to amount to $14 800.

For each situation:

i. State the international accounting standard that should be applied (number and name)

ii. Explain the main requirements of the accounting standard which apply to situation

iii. State how the situation should be treated in the published accounts of the company for the year ended 31 December 2014.