Gettry Doffit pic is an international company with worldwide turnover of £26 million. The activities of the company include the breaking down and disposal of noxious chemicals at a specialised plant in the remote Scottish countryside. During the preparation of the financial statements for the year ended 3 I March 20X5, it was discovered that:

1 Quantities of chemicals for disposals on site at the year-end included:

The company often purchases a standard chemical used in processing from a North American company, and the dollars will be applied towards this purpose.
3 The company entered into a contract to import a specialised chemical used in the breaking down of magnesium perambulate from a Nigerian company which demanded the raising of an irrevocable letter of credit for £65,000 to cover 130 tons of the chemical. By 3 I March 20X5 bills of lading for 60 tons had been received and paid for under the letter of credit. It now appears that the total needed for the requirements of Gettry Doffit pic for the foreseeable future is only 90 tons.
4 On 16 October 20X4 Gettry Doffit pic entered into a joint venture as partners with Dumpet Andrunn pic to process perfidious recalcitrant (PR) at the Gettry Doffit pic site using Dumpet Andrunn pic's technology. Unfortunately, a spillage at the site on 15 April 20X5 has led to claims being filed against the two companies for £12 million. A public inquiry has been set up, to assess the cause of the accident and to determine liability, which the finance director of Gettry Doffit pic fears will be, at the very least, £3 million.

Required:
Discuss how these matters should be reflected in the financial statements of Gettry Doffit pic as on and for the year ended 31 March 20X5.

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(A) Axylotl peroxide (B) Pterodactyl chlorate 40,000 gallons 35 tons Chemical A is disposed of for a South Korean company, which was invoiced for 170 million won on 30 January 20X5, for payment in 120 days. It is estimated that the costs of disposal will not exceed 75,000 60,000 of costs have been incurred at the year-end. Chemical B is disposed of for a British company on a standard contract for 'cost of disposal plus 35%', one month after processing. At the year-end the chemical has been broken down into harmless by- products at a cost of 77,000. The by-products, which belong to Gettry Doffit plc, are worth 2,500. 2 To cover against exchange risks, the company entered into two forward contracts on 30 January 20X5: No. 03067 No. 03068 Sell 170 million won at 1,950 won 1: Buy $70,000 at $1.60 31 May 20X5 = 1: 31 May 20X5 Actual sterling exchange rates were: won $ 30 January 20X5 1,900 1.70 31 March 20X5 2,000 1.38 30 April 20X5 (today) 2,100 1.80