D55 On 30 June 2019, Ollivanders Ltd., a firm specialising in magical wands, estimated warranty claims for the twelve months just finished at $10,000. But, during the next twelve months it recorded claims for faulty wands of $30,000. The manager assessed the product line that caused the blow out in estimated claims and concluded that the estimate for warranty claims at the end of the year on 30 June 2020 should only be $5,000. Consider the effect of the decision and suggest reasons why the manager might make such an assessment. (6 marks) Enter answer 56. The Ministry of Magic, the regulator of businesses, is concerned about the public financial reporting that was produced by Eeylops Owl Emporium Ltd. The Ministry was aware that the emporium had not indicated that it was discontinuing a division of its business and that for the last financial year it had not included an acquisition of a new building in its balance sheet, which it had purchased some three months before the end of the financial year. Explain why the regulator is concerned with such oversights and what the emporium is required to do in each case. (6 marks)