Prep 96 Identify whether the statement is TRUE or FALSE. If the statement is FALSE, you will need to provide an explanation of WHY the statement is FALSE. Your explanation will need to show your understanding of the issue at hand. 1.1 Business C has a year-end of 28 February. The pre-adjustment trial balance at 28 February 2020 showed a line item for electricity expense of 36 000. On 28 February 2020, the business received the electricity bill from Eskom for February's electricity 1 950. This bill will only be paid in March 2020. The statement of comprehensive income for the year ended 28 February 2020 will report an electricity expense of 37 950. 1.2 A healthcare company is trying to develop a new drug for patients with diabetes. The project is in the research phase. The CEO told the accountant that the research might move into the development phase. The CEO has estimated that the total cost of the project to date is 39 000. The accountant tells the CEO, "this research project meets the asset recognition criteria and should be recognized on the statement of financial position". Is the accountant's statement true or false? 1.3 On 31 January 2020, Business A purchased inventory for R15 000 cash. The supplier agreed to a 5% trade discount. Transport costs of R1 300 were paid to deliver the inventory to the business' premises. The inventory was delivered on the same day of purchase. On 31 January 2020, the inventory will be reported at R15 550 on the statement of financial position