EXPLAIN ALL THE PARTS, DO NOT SKIP ANY PARTS. DO NOT GIVE DIRECT ANSWERS AND EXPLAIN EACH POINT

(d) City Repertory Theatre is a famous professional theatre company in the city. Its mission is to produce and develop a high quality and innovative repertoire, encompassing classic and contemporary theatre. The Company's year-end date was at 30 June 2017 and the Financial Statement was issued on 29 August 2017. The annual revenue of the Company is about $3 million and the total asset is about $2 million in 2017. Using the principle of adequate disclosure, state the items below that may or may not require disclosure with the financial statements. If yes, please identify the nature of disclosure; if no, please give the reason 1. The Company purchased a $280 durable pencil-sharpener in March 2017 with the The company did not depreciate its cost but estimated useful life of 3 years for office use. charge to expense when purchase 2. The Company is being sued by a former artist, Mr. Kris Heung for claiming $0.5 million dollars of compensation, who was injured during the drama performance in 2016. Mr. Heung claimed that the accident was totally due to the negligence of the Company's technical and stage director and the hearing date is fixed on 1 September 2017. 3. In order to develop the overseas co-productions, the management has hired an international artistic director who will join the team in September 2017. The management estimated that he can help the company's performance income to be increased at least 20% next year 4. On 17 July 2017, a fire accident destroyed all the sets, props and costumes in the warehouse with the cost of about $800,000 5. The details of the Company's bank loan with the amount of $2 million due to New Territories Bank as stated in the 2017 Statement of Financial Position 6. A black box production is scheduled to be performed in November 2017 with the expected performance income of $50,000. The management was informed on 1 August 2017 that it was cancelled due to the venue leasing problem. (30 marks)