a.) In Year 1, Wellbeing Ltd began to receive complaints from physicians that patients were experiencing unexpected side effects from the companys healthy drink. The company took the drink off the market near the end of Year 1. During Year 2, the company was sued by 1,000 customers who had had a severe allergic reaction to the companys drink and required hospitalisation. At the end of Year 2, the companys lawyers estimated a 60% chance the company would need to make payments of 3000 to settle each claim. At the end of Year 3, while none of the cases had been resolved, the companys lawyers now estimated that the company would have to pay 4500 to settle each claim. In Year 4, 400 claims were settled at a total cost of 1.2 million. Based on the experience, the company believes that the remaining cases will be settled for 5,400 each. Required: Advise on the accounting treatments for Year 1 4 related to this litigation.

b) The board of directors of Coco Plc approved a restructuring plan on November 1, Year 1. On December 1, Year 1, Coco publicly announced its plan to close a manufacturing division in Birmingham and move it to China and the companys Birmingham employees were notified that their jobs would be eliminated. Also, on December 1, Year 1, to ensure an orderly transition, management promised a termination bonus of 10,000 to any employees who remains with the company until his or her position is terminated in the fourth quarter of Year 2. The company also agreed to pay termination bonuses to 120 employees at the end of Year 2, for a total of 1.2 millions. The present value of the termination bonus is 1 million. Required: Determine (with explanation) the provision that should be recognised for Coco Plc.s restructuring plan. Identify the dates on which journal entries should be made and the amounts to be recorded.

c) On June 1, Year 1, Tomtom Ltd. entered into a contract with Office Rent Ltd to rent an office space in London on January 30, Year 2, at a price of 4000 per month for 12 months. The office will be used for the marketing team. On December 1, Year 1, Tomtom realised 80% of its staff were happily working from home. As a result, the company believes it no longer has a need for a physical office space. However, it is not allowed to rent out to a third party. The contract is cancellable with a cancellation fee of 20,000. Required: Advise on the accounting treatments related to the contract, if any, Tomtom Ltd. should make on December 31, Year 1.