2: a. Mildred Plc had goods in store which was flooded due recent monsoon rains. None of the goods were insured and have suffered damage due to the rain. The details of inventory are as follows: Net realisable value () Item Cost () -2345 7,000 9,000 12,000 12,500 8,000 4,000 14,000 8,000 27,000 33,000 68,000 66,500 Page 3 of 5 b. Required: Calculate the value of inventory that should be disclosed in the financial statements of Mildred Limited. You must clearly show the reasoning as per the relevant IAS along with workings. (5 marks) Yummilicious Limited is a famous caterer for big events. Yummilicious was asked to cater a birthday party in 2019. Twenty guests of the party became gravely sick after eating the food supplied by Yummilicious at the party. The guests sued Yummilicious but the company thinks it is not at fault. The lawyers of the company that it is probable that it will not be found liable as at December 31, 2019. However, the lawyer's opinion changes by December 31, 2020 due to the developments in the case. Required: Should any liability be recorded in the financial statements of Yummilicious as at: At 31 December 20192 (1.5 marks) P W 02021.pdf X Cite This For Me: Harvard, APA X FINAL EXAM 12-4PM 391/mod_resource/content/2/ACC2107%20S1%20EX % 2020 2021.pdf 4/5 b. Calculate the value of inventory that should be disclosed in the financial statements of Mildred Limited. You must clearly show the reasoning as per the relevant IAS along with workings. (5 marks) Yummilicious Limited is a famous caterer for big events. Yummilicious was asked to cater a birthday party in 2019. Twenty guests of the party became gravely sick after eating the food supplied by Yummilicious at the party. The guests sued Yummilicious but the company thinks it is not at fault. The lawyers of the company that it is probable that it will not be found liable as at December 31, 2019. However, the lawyer's opinion changes by December 31, 2020 due to the developments in the case. Required: Should I any liability be recorded in the financial statements of Yummilicious as at: At 31 December 2019? (1.5 marks) C. ii. At 31 December 2020? (1.5 marks) You must provide clear explanations as per the relevant accounting standard. John Banks, a former employee of ABC Bank has sued the Bank for being dismissed on unfair grounds. ABC's lawyers advise that the claim is unlikely to be successful although it the chance of settlement might not be remote. The lawyers are charging BD 10,000 to ABC Bank. If successful, the claim will be settled for BD 60,000. Required: How should this lawsuit be treated in the financial statements of ABC Bank as per IAS 37? Give clear answers along with relevant amounts. (2 marks) Following is a list of events occurring after the reporting period: d. i. ii. iv. V. Purchase of an investment A change in the rate of tax, applicable to the previous year An increase in pension benefits Losses due to fire An irrecoverable debt suddenly being paid Required: For each of the above item, state, with detailed reasoning, whether an adjustment is required or not to the financial statements. Make any assumptions as necessary. (5 marks) Question 3