Question 4 The accountant of Hawa Limited has come across the following accounting issues while nalizing the nancial statements for the year ended December 3L 213D? and sought your opinion being the company IFRS consultant. 5) b) Hawa Limited issued a 1 year warranty for defects on a single item of equipment that it delivered to its customer. At the companyfs year end, the company is being sued by the customer for refusing to replace or repair the item of equipment within the warranty period, as Hawa Limited believes the defect is not covered by the warranty, but instead has arisen because of the customer not following the instructions provided in the working manual of the equipment. Khan and Khan the company's lawyer has advised ALI Limited that it is more likely than not that they will be held liable. This would result in the company being forced to replace or repair the equipment plus pay court costs and a fine amounting to approximately L$l,,. Based on past experience with similar items of equipment, the company estimates that there is a T0954: chance that the equipment would need to be replaced which would cost L$4DD,DDD,UUD and a 3D% chance that the repair would only cost about L$i13|=|3|3 The company also manufactures small items of equipment which it sells through a retail network. The company sold ll items of this type this year, which also hate a 1 year warranty if the equipment fails to perform properly. Based on past experience, 5% of items sold are returned for repair or replacement. In each case, one third of the items returned are able to be repaired at a cost of L$l, each, while the remaining two thirds are scrapped and replaced. The manufacturing cost of a replacement item is L$ l ,. Hawa Limited has a contract to buy LDDD Kilograms of copper om a China Co each month for Sl per Kilograms. From each Kilogram of copper Hawa Limited make one role of cable. The company also incurs labor and other direct variable costs of $l,E}DD per role. Usually company can sell each role of cable for $4,5 but in late July 20H? the market price falls to $3,5'll' per role. The company is considering ceasing production since it thinks that the market may not improve. If the company decides to cancel the copper purchase contract without 2 months' notice it must pay a cancellation penalty of Sli for each of the next two months. Required Discuss the accounting treatment of the aboye situations