Question
b) Assume you are the Chief Accountart of Changanyikeni Co Ltd. The following situations have ai sen during the preparation of the draf: financial statements
b) Assume you are the Chief Accountart of Changanyikeni Co Ltd. The following situations have ai sen during the preparation of the draf: financial statements of Changanyikeni for year ended 30 April, 2023:
The company is buing sued by its one of ts former employee (Mr Malyamawc; for wrongful terrinat or and breach of some of employment contract terms The company's lawyer believe that the company will love the case (and have to meet the claimant's costs). But there is uncertanty on the amount they have to compensate Mr.Maliyamewe but the lawyer estimate that there is 40% chance the amount will be T28 50.000,00C, 30% da ce will be TSZ 50,000,000 and 30% chance it will be 76.000.000 Costs of the chirant are estimated at TZS 9,700,000
i) Cue in the faling demand of its produes the Company is hes planned to lay c some of its employees an 30April, 2024. This dacision has beer arcunced publicly on 3 May, 2023, and a detailed forral plan prepared. The plan proposes to make 60% employees redundant, etran 3 other staff. Il estimate the redundancy cost will amount to TZ5 322,000,000 and the discounting rate is 7%.
During the year to 30 April, 2023, & customer commenced legal proceedings against a company, claiming that one of the land aroducts that d manufactures had caused several members of his family to become acnously ill. The company's lawyers have advised that the action will probably not succeed.
Required: Explain how the above will affect the financial statements for the year to 30 April 2023 in accordance to 145 37-Provision, contingent Liability art ontingeniesse (Ghaw all workings and Journal endnes where necessary). 112 Marks]
QUESTION SIX 2) Financial insturerleans of raising finance. In practice, the term covers a wide range of sophistioen financial arrangements, had simple examples Include loans of various types and share issue. The e ere three internacions alandards which deal with hinancial instruments sy IFRA AFinancial instrumon roagon and measuremen; of firadiatumert IAS 12 Financial Anamument Presentation and IFRS 7 Fancist instrument Disclosure
Required: with vvd examples, Dierentiate financial assal from financial liability. (2 Marks) i) Cxplain the recegnt on ane denilin anteria of Financial instrument
(2 Marks) wavid x, explair how Finansals are measured subsequently to nual measurement. (E Marks)
b) Airani Plc inveata in bancs Somalimes, il tisdak mes: bonds by "Ipping mam qucky for pt. Others are held for the long term.
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