KZB Bookstore Bhd (KZB) was established in January 2010 The following are transactions in relation to payables of KZB for 2017 Date Transactions 31 January KZB borrowed RM500,000, by signing a one year, 6 note at H Note Bank 5 February Purchased inventory from Balirung Stationery amounted RM45,000 on credit The credit term is 5 30, n 60 28 March Paid Balirung Stationery for the inventory bought on 5 February 19 August Received a letter from Inland Revenue Board (IRB) mentioning the additional of RM22,500 that KZB need to remit payment to IRB The additional tax is in regards to the audit done by IRB on the 2016 sales Payment need to be paid on or before 15 January 2018 11 November Received 3 month deposit from a tenant for renting a shop lot owned by KZB that situated in Cyberjaya The monthly rental fee is RM2,500 The tenancy contract begins on 1 March 2018 13 December Signed a new agreement with Hijrah Bank on the extension of maturity period of the outstanding loan balance which was made on 2010 The outstanding balance of the bank loan is RM56,000 The loan due date which is supposedly on January 2018 has been extended to July 2020 24 December Purchased inventory from Easy Bean Bookstore Bhd amounted RM145,000 on credit The credit term is 5 60, n 120 31 December The income tax expense for 2017 is RM35,000 Payment is due on 15 January 2018 Additional information KZB Bookstore Bhd remits the payment to IRB on 15 January 2018 KZB Bookstore Bhd uses calendar year for its accounting period REQUIRED Determine the amount of current liability and non current liability as at 31 December 2017 Presented below are two independent cases Case 1 XX Blaze Bhd is a chemical laboratory based company The company decided not to buy any insurance on the company but, rather to self insure in case of fire loss Obtaining opinion from the expert, the probability of fire loss was measured at a value of RM1,200,000 (the occurrence of fire loss is estimated once in every 15 years) The new account clerk recognizes a provision of RM80,000 each year Case 2 Sonic HD Bhd is a company produces television The company provides warranties at the time of sale to its customers for its product Under the warranty period, the company is responsible to make good of any its defective products either by repair or replacement within 3 years from the date of sale Based on its experience, it is probable that there will be some warranties claims and the company made an allocation for warranty provisions REQUIRED Based on MFRS 137 Provisions, Contingent Liabilities and Contingent Assets comments whether the accounting treatment practices in both cases are in accordance to the MFRS Provide your justifications

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KZB Bookstore Bhd (KZB) was established in January 2010. The following are transactions in relation to payables of KZB for 2017: Date Transactions 31 January

KZB Bookstore Bhd (KZB) was established in January 2010. The following are transactions in relation to payables of KZB for 2017:

Date	Transactions
31 January	KZB borrowed RM500,000, by signing a one year, 6% note at H-Note Bank.
5 February	Purchased inventory from Balirung Stationery amounted RM45,000 on credit. The credit term is 5/30, n/60.
28 March	Paid Balirung Stationery for the inventory bought on 5 February.
19 August	Received a letter from Inland Revenue Board (IRB) mentioning the additional of RM22,500 that KZB need to remit payment to IRB. The additional tax is in regards to the audit done by IRB on the 2016 sales. Payment need to be paid on or before 15 January 2018.
11 November	Received 3 month deposit from a tenant for renting a shop lot owned by KZB that situated in Cyberjaya. The monthly rental fee is RM2,500. The tenancy contract begins on 1 March 2018.
13 December	Signed a new agreement with Hijrah Bank on the extension of maturity period of the outstanding loan balance which was made on 2010. The outstanding balance of the bank loan is RM56,000. The loan due date which is supposedly on January 2018 has been extended to July 2020.
24 December	Purchased inventory from Easy Bean Bookstore Bhd amounted RM145,000 on credit. The credit term is 5/60, n/120.
31 December	The income tax expense for 2017 is RM35,000. Payment is due on 15 January 2018.

Additional information:

KZB Bookstore Bhd remits the payment to IRB on 15 January 2018.
KZB Bookstore Bhd uses calendar year for its accounting period.

REQUIRED:

Determine the amount of current liability and non-current liability as at 31 December 2017.

Presented below are two independent cases:

Case 1:

XX-Blaze Bhd is a chemical-laboratory based company. The company decided not to buy any insurance on the company but, rather to self-insure in case of fire loss. Obtaining opinion from the expert, the probability of fire loss was measured at a value of RM1,200,000 (the occurrence of fire loss is estimated once in every 15 years). The new account clerk recognizes a provision of RM80,000 each year.

Case 2:

Sonic HD Bhd is a company produces television. The company provides warranties at the time of sale to its customers for its product. Under the warranty period, the company is responsible to make good of any its defective products either by repair or replacement within 3 years from the date of sale. Based on its experience, it is probable that there will be some warranties claims and the company made an allocation for warranty provisions.

REQUIRED:

Based on MFRS 137 Provisions, Contingent Liabilities and Contingent Assets comments whether the accounting treatment practices in both cases are in accordance to the MFRS. Provide your justifications.