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only if you know all answerbof all questions Question 1 An entity has taken a loan facility from a foreign bank that is to be
only if you know all answerbof all questions Question 1 An entity has taken a loan facility from a foreign bank that is to be repaid within a period of months from the end of the reporting period. Prior to the end of the reporting period, the entity and the bank enter into an arrangement, whereby the existing outstanding loan will, unconditionally, roll into the new facility which expires after a period of 5 years. (a) Should the loan be classified as current or non-current in the balance sheet of the entity? (b) Will the answer be different if the new facility is agreed upon after the end of the reporting period? (c) Will the answer to (a) be different if the existing facility is from one bank and the new facility is from another bank? (d) Will the answer to (a) be different if the new facility is not yet tied up with the existing bank, but the entity has the potential to refinance the obligation? Question 2 On 31 March 20X1, the inventory of XYZ includes spare parts which it had been supplying to a number of different customers for some years. The cost of the spare parts was Rs.10 million and based on retail prices at 31 March 20X5, the expected selling price of the spare parts is Rs.12 million. On 15 April 20X1, due to market fluctuations, expected selling price of the spare parts in stock reduced to Rs.8 million. The estimated selling expense required to make the sales would Rs.0.5 million. Financial statements were authorised by Board of Directors on 20th April 20X1. As at 31st March 20X2, Directors noted that such inventory is still unsold and lying in the warehouse of the company. Directors believe that inventory is in a saleable condition and active marketing would result in an immediate sale. Since the market conditions have improved, estimated selling price of inventory is Rs.11 million and estimated selling expenses are same Rs.0.5 million. What will be the value inventory at the following dates: (a) 31st March 20X1 31st March 20X2
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