J12 X fc A B D F F G 1 Conceptual Framework Question (5 marks) The following lists several transactions from Great Dane Inc.'s ("GDI") current year follow. GDI IFRS. The financial statements, particularly net income, will be used in court to determine a divorce settlement for the company president's spouse. You are working on the team that is representing the SPOUSE 4 What are the users objectives / needs? (1 mark) 5 LD 7 For each of the following situations, discuss the appropriateness of the journal entries in terms of the IFRS concept 1. Merchandise inventory that cost $330,000 was reported on the statement of financial position at $390,000, which is the expected selling price less estimated selling costs. The 8 following entry was made to record this increase in value: Inventory $60,000 10 Sales Revenue $60,000 00 11 12 2. The company is being sued for $500,000 by a customer who claims damages for personal injury that was allegedly caused by when they slipped and fell on the ice outside their store. Company lawyers feel extremely confident that the company will have no liability for damages resulting from the situation. Nevertheless, the company decides to make the following entry: 13 Journal Entry DANSKE A B D E F G H Litigation Expense $350,000 Litigation Liability $350,000 3. GDI has been concerned about whether intangible assets could generate cash in case of liquidation. As a result, goodwill arising from a business acquisition during the current year and recorded at $800,000 was written off as follows: Writedown Loss Goodwill $800,000 $800,000 4. GDI believes that their internally generated customer list has a value of approximately $150,0000, as such they have capitalize the value as follows: Customer List $150,000 Revenue Gains $150,000