2. Casemiro Bhd is a company engaged in manufacturing spare parts for the automotive industry. The directors authorized issueance of the companys financial statements for the year ended 20 June 2020 on 15October 2020.

The following matters were considered by the directors of Casemiro Bhd in the preparation of the financial statements for the year ended 30 June 2020.

Required

Explain how each of the below events should be treated inthe financial statements of Casemiro Bhd for the year ended30 June 2020.

b) On 28 June 2020, the directors of Casemiro Bhdagreed to close down the tyre rims division. A detailed plan for closing down this division was agreed on 4 July 2020 and notices were sent to the affected staff, suppliers and customers of the division. Termination benefits and other direct costs to be incurred as aresult of the closure have been estimated to theamount of RM1,000,000.