Id Stores, a wholesaler chain of stores, has over 500 branches nationwide. Their product range is divided into six main categories i.e. Toiletries, Electronics, Food, The Corporate World, wearing apparel, and Toys. The following information relates to the accounting period just ended: I. Although this varies from product range to product range but the company generally allows the dissatisfied customers a return policy of 30 days. (For Electronics this policy generally, however, is 1 year & for toys its 90 days). There is a 40% probability of 5% goods being returned in general category and 60% probability of 3% goods being returned. 3% of the Toys customers usually come up with the defective goods. Complaints regarding the Electronics are channelized back to the suppliers. II. On May 2nd 2008, an employee got injured while unloading the goods in the company godowns. He later sued the company for having a lack in the safety measures for its employees, damages and other amounts mentioned in the claim is 1.5 million. According to the legal advisors it is highly probable that court may award a 500,000 compensation in total. III. At the year end, the company had 950 laptops of a good brand each costing Rs.65,000. There was rising trend of prices in the market, which influenced the companys sale policy and these computers were retained in stock till July 25, 2008 when market price started falling and within one weeks time declined to Rs.68,000. This situation forced the management to start selling. However, the whole stock could be sold till August 22, 2008 and fetched total sale proceeds of Rs.40.85 million. IV. The Government announced on 5th July that the rates of taxes will be changed, and all changes shall be applied retrospectively. V. A suit for infringement of patents, seeking damages of Rs. 2 million, was filed by a third party. SLs legal consultant is of the opinion that an unfavourable outcome is most likely. On the basis of past experience he has advised that there is 60% probability that the amount of damages would be Rs. 1 million and 40% likelihood that the amount would be Rs. 1.5 million VI. The Board of Directors announced on August 25th a 20% stock dividend for the year ended 30th June, 2008. VII. Investments of the company amounting to Rs.10 million at the year end were disposed off for Rs. 6 million in response to a market crash on July 27, 2008. VIII. A law suit for Rs.500,000 was filed. Unfavorable outcome is probable. A reasonable Estimate of Courts award is in the range between Rs.100,000 and Rs.400,000. The companys legal advisor believes the best estimate of potential liability is Rs.200,000. IX. During December 2009, law suit was filed against the company claiming Rs.800, 000. In the opinion of legal advisor it is reasonably possible that damages will be awarded to the plaintiff. Required: How the matters presented above are adjusted in the financial statements for the period? Accounting year ends on 30th June 2008. (Matters should be discussed in accordance with IAS-37)