Question
A. Alma, a supplier of rice to school and office canteens within the Kuching and Samarahan area, made the following purchases and supplies during the
A. | Alma, a supplier of rice to school and office canteens within the Kuching and Samarahan area, made the following purchases and supplies during the year ended 31 December 2019.
Each bag of rice is sold at RM11 per bag. Due to a glut in the overall supply of rice, since October 2019, the cost price per bag has dropped. On 31 December 2019, if Alma were to make a new purchase, it would cost her only RM6 per bag. In order not to lose her customers, Alma would have to reduce her selling price.
At reporting date, 31 December 2019, 100 bags of rice were left unsold. Alma adopts the First In-First Out (FIFO) method of managing its inventory.
Required:
For each of the following situation, and in accordance with the measurement basis of MFRS 102 Inventories, determine the amount of inventory to be shown in the statement of financial position on 31 December 2019. Where appropriate, show journal entries for the inventory write-down.
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B.
| Best Bake makes a variety of cakes, for its local and overseas market. The entity has a financial year end of 30 June. During the year ended 30 June 2020, Best Bake had the following transactions:
Required:
(15 marks)
(5 marks) (Total: 30 marks) | |||||||||||||||||||||
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QUESTION 2 |
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A. | Given below are independent situations. Assume that the financial year for each business entity ends on 30 June.
Required:
For each independent situation given above, decide if the situation gives rise to a liability, a provision or a contingent liability. Indicate how it is to be presented or disclosed. (Your discussion should be in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets and MFRS 101 Presentation of Financial Statements. Show workings where relevant) (15 marks) |
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