I am writing to seek your advice regarding numerous accounting issues for the year ended 30 June 2024. Our senior accountant is on indefinite sick leave and we require your services. I have included following items that we require for your completion. All work must comply with the Australian Accounting Standards and please also provide a detailed explanation of the rationale behind the appropriate accounting treatments. The items of concern are as follows: Item 1 The following information is financial statements of High Lid for the year ended 30 June 2024. Income statement of High Lid for the year ended 30 June 2024 $'000 $'000 Sales 927 Interest revenue 11 Dividend revenue 5 Total Income 943 Less Expenses Cost of Sales 320 Other expenses (paid) 15 Bad debts expenses 7 Wages expense 266 Interest expense 14 Depreciation - plant 95 Loss of sale of plant 10 (727) Profit before income tax 216 Less income tax expenses (74) Profit for the year 142Statement of financial position of High Ltd as at 30 Jupe 2023 and 2024 23] @ 2024] Lessallowanceforbaddebts [ (D] @] 15 I Non-current assets Plant at cost 2115 Less accumulated depreciation (230) (2595) Current liabilities _ Trade payables m Accruals Non-current liabilities Convertible notes Shareholders\" equity I R |ssued capital Retained eamings Other information 1) For the purposes of the statement of cash flows, High Ltd defines cash and cash equivalents as including cash on hand and at bank and shori-term deposits at call, net of outstanding bank overdrafts. 2) During the reporting period, High Ltd made two issues of ordinary shares as follows: # the convertible notes outstanding at 30 June 2024 were converted to 150 000 ordinary shares issued at a conversion price of 52.00 per share; and 200 000 shares were issued at $2.00 per share for cash. 3) During the year ended 30 June 2024, plant and equipment costing $60 000 and having a book value of 330 000 was sold and made a loss of 510 000. 4) The opening and closing balances of the \"accruals accounts (under current liabilities) were attributable to wages and salaries and interest payable as follows: Wages and Salaries Dpening at 1/7/2023 55,000 $15,000 Closing at 30/6/2024 $10,000 $20,000 5) The company had access to bank overdraft facilities of up to a maximum of $100 000. The bank overdrafts were payable on demand and were subject to annual review. 6) The accounting policy of High Ltd was to disclose interest received and dividends received as investing activities. Please prepare a statement of cash flows for High Ltd using the direct method. Additionally, include the note sections for cash and cash equivalents and provide a reconciliation of profit for the period to net cash flows from operating activities. ltem 2 Please provide some recommendation on the following issues with appropriate accounting treatments as per the Australian Accounting Standard. 1) As at the beginning of the current financial year 2024, High Ltd has two provision accounts: {a) Provision for lawsuit claims $14m, and (b) Provision for warranty $25%m. Dwring the year ended 30 June 2024, the lawsuit claims were settled at $16m and warranty costs of 532m were paid. We would like to increase the warranty provision to $39m at year end in tandem with the increase in products sold during the year. Please provide journal entries (if any) that we should make for 30 June 2024 to prepare our annual report. Please show all workings (settlement of the lawsuit claims and increase of warranty provision). High Ltd is the primary contractor responsible for constructing a power plant for Thai Lid. It has been discovered that there are defects in the construction of the power plant. The estimated cost to fix these defects is $100m. It had previously recognised a provision for warranty of $40m on the project as part of project costs. However, High Ltd believes it can recover a substantial part of the costs from the subcontractors who performed some of the construction S works. Megotiations with these subcontractors are ongoing, and so far, only two subcontractors have accepted liability. The amount of reimbursement that is considered virtually certain is estimated to be $10m. 4) Can you explain with journal entries how High Ltd shall account for the above estimates of costs and reimbursements? YWhat would be criteria for recording such liabilities? The ice cream factory located in Thailand has been incurring losses for the past 3 years. Management is contemplating the option of either restructuring the plant or selling it to an external party. Management believes that losses will continue for another 2 years at about $30m per year before the business operation could turnaround. At year end, neither the restructuring plan nor the plan to sell was finalised. The carmying amount of the net assets of the plant at year end was 5400m. Based on its current condition, the recoverable amount of the plant was estimated at 5350m. Can you explain the accounting treatment that shall be accorded to the above case, shall we record provision liabilities? On 18 March 2024, the Board of Directors of the company decided to close down the chocolate making products plant. On 25 May 2024, a detailed plan for closing down the plant was agreed by the Board; letters were sent to customers warning them to seek an alternative source of supply and redundancy notices were sent to the staff of the plant. The carrying amount of the net assets of the plant is 520m. The net proceeds from selling the individual assets and settling the liabilities is $12m. Other costs expectad to be incurred are as follows. = termination costs of $2m (changes in management structure costs), costs to sell a line of business $3m, + staff relocation costs $1.2m, = staff retraining costs $1.4m and expected additional operating costs for the first quarter of 2025 financial year 58m. The closure of the plant is expected to be completed by 25 August 2024. The company's year- end is 30 June. Can you please explain, with reasons, whether the closure of the plant shall be recognised in the financial statements of 2024. Also, state the amount of provision, if any, which shall be recognised in its financial statements