PART B (23.0 marks: 31 minutes) Gray Limited manufactures bottled spring water on a farm in the Natal Midlands. The water used is pure mineral water drawn from a natural underground source In terms of government legislation dated 1 July 2010, Gray Limited may use the water from the underground source sustainably and responsibly for the foreseeable future. The financial director, Mrs Steele, feels that this underground source should be reflected on the company's statement of financial position as it is one of Gray Limited's most important assets REQUIRED You have been requested by the audit senior to prepare a tabular response in which, with reference to the relevant definition and recognition criteria provided in the Conceptual Framework only, you discuss how Gray Limited should account for the underground source in their financial statements for the year ended 31 December 2016. Marks 23.0 Total Ms K also noticed that Kong Limited has both a deferred tax asset and a deferred tax liability. She vaguely remembers her accounting lecturer mentioning the concept of "offsetting" but cannot remember the details regarding offsetting. REQUIRED: Show and reference all workings Round off to the nearest rand Prepare the journal entries of Kong Limited for the year ended (a) 31 December 2016 to account for the above transactions. Marks 8.5