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please provide with calculation and explanation. thank you. (B) Determine whether the following independent situations are provisions or no If yes, briefly explain the amount
please provide with calculation and explanation. thank you.
(B) Determine whether the following independent situations are provisions or no If yes, briefly explain the amount that should be recognized in the current financial year. A legal claim by a customer for RM50,000. Company's lawyers believe that there's 30 percent chance of winning the case and a 70 percent chance of losing the case with a settlement of RM35,000. (2 Marks) (ii) A construction of workers' houses in a timber location is at a cost of RM500,000. The Department of Forestry requires the removal of any construction at the end of concession. The cost of removal is estimated at RM50,000. (2 Marks) The warranty covers for the cost of any manufacturing defects for 3 months after purchase. Based on the total sales for the year, if only minor defects, the repair costs is RM100,000, whilst if major defects, the repair costs is RM400,000. Based on previous data, 70 percent of the company's products have no defects, 20 percent have minor defects and 10 percent have major defects. (3 Marks) (iv) A company has been awarded with a concession for 100 hectares of logging area for 10 years. The Department of Forestry requires the re- planting after the end of the concession period. The estimated re- planting cost is RM2,000,000Step by Step Solution
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