QUESTION 1 (38 marks) DragonFly Limited is a retail company in the technology industry. The company has a 31 March financial year-end. You are busy with the audit of the 31 March 2022 financial statements, and the overall materiality for the audit was set at R1 500000. During the audit, you came across the following transactions and events that took place during the 2022 financial year: Inventory imported On 2 March 2022, DragonFly Limited imported inventory from China. The container with the inventory was shipped FOB (shipping point) on 7 March 2022. The inventory arrived at DragonFly Limited's premises on 10 April 2022. Per the supplier invoice, the inventory cost is CNY 1255520 , and the amount is payable by 30 April 2022. DragonFly Limited paid the outstanding amount on 28 April 2022. The following exchange rates were applicable: DragonFly Limited's accountant did not record the inventory purchase in the company's records for the 31 March 2022 financial year. The accountant believes that the inventory should only be recognised once received. Therefore, the accountant recorded the inventory in the company's records on 10 April 2022 by processing the following journal: 1.1) With reference to the Inventory imported, discuss whether you agree with the accountant's treatment of the transaction. Include in your discussion: - Why do you or do you not agree with the accountant's recognition of the inventory and the effect of the accountant's recognition of the inventory. - The correct initial recognition and subsequent recognition with reference to the requirements of IAS 21. - The correct journal entries to account for the purchase of the inventory in DragonFly Limited's financial statements for the year ended 31 March 2022