1 .Comfort Pty Ltd is a wholesaler of home furniture. The recent bushfire destroyed one of its warehouse located in Cooma, NSW. The inventory loss amounts to $180,000. Required: Discuss and justify how Comfort Pty Ltd should account for the inventory loss of $180,000 as an expense, in accordance with the definition and recognition criteria provided in the AASB Conceptual Framework.

2.LMS Ltd was incorporated on 1 January 2020. The following transactions and events occurred since incorporation: 1 Feb 2020 LMS Ltd makes an offer to the public for investors to subscribe for 2,000,000 shares, at an issue price of $3.00 per share, with $2.20 payable on application and $0.80 payable on a call to be made at a later date. 28 Feb 2020 Applications close, with applications received for 2,200,000 shares. 10 Mar 2020 Shares are allotted to applicants on a first-in first-served basis, and application money is refunded to unsuccessful applicants. Required: Prepare the journal entries to record the transactions of LMS Ltd on 10 March 2020. Narrations are not required.

3.Nature Pty Ltds machinery control accounts shows carrying amount for the following machine as at 1 July 2019: Machine A (cost $250,000) $200,000 Machine B (cost $340,000) $320,000 Machine A was acquired on 1 July 2017 with estimated useful life of 10 years and no residual value. Machine B was acquired on 1 January 2019 with estimated useful life of 8 years and residual value of $20,000. All machinery is depreciated on a straight-line basis. Required: Calculate the depreciation charge for Machine A and B for the year ending 30 June 2020. Show all workings. On 1 July 2020, Nature Pty Ltd traded in Machine B and paid cash $40,000 to exchange for Machine C, which costs $300,000. Calculate the resultant gain or loss on the transfer of Machine B. Show all workings.