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QUESTION 2 (8 MARKS) Gogo Berhad is in the process of finalizing its account for the year ended 31 December 2017. The accounts are due to be issued to the shareholders on 1 April 2018 The following are transactions that have occurred but as a junior accountant, you are unsure of the accounting treatment 1. On 20 January 2018, the company reviewed its trade receivables and determined that RM10,000 of trade receivables that had been carried for years on the Statement of Financial Position appeared unlikely to be collected 2. Received RM20,000 on 30 January 2018 as a result of lawsuit in connection to a breached 2017 contract. The company had not established a receivable before the award was received 3. As at 31 December 2017, one of the customer, High Heels owed the company RM25,000. At this date, the board of directors of Gogo Berhad were of the opinion that the debt was collectable and no provision for doubtful debt was made. On 6 March 2018, High Heels was placed under receivership 4. On 4 February, the board of directors agreed to sell one of its subsidiary in Melaka since the company had been making losses for two years. Required: a. Indicate if the above events or transactions are adjusting or non-adjusting events (4 marks) b. Briefly explain the accounting treatment of an adjusting event and non-adjusting event (4 marks) END OF QUESTION PAPER CONFIDENTIAL/3