Question 5 SLS Pte Ltd (SLS) is preparing its financial statements for the year ending 31 December, 20X7 in accordance with IFRS. The financial statements are due to be authorized for issue on 23 March 20X8. The following issues which have not yet been considered, require your attention: (a) (b) (c) A flash flood during December 20X7 resulted in the complete destruction of a customer's warehouse, leading to that company filing for insolvency in January 20X8. The full balance of $20,000 owing by this customer is included in the statement of financial position as at 31 December 20X7. The liquidator announced in January 20X8 that 30% of the outstanding amount will be paid upon liquidation. (5 marks) SLS owns 100,000 shares in a Company X listed on the Stock Exchange of Singapore (SGX) which were treated as a fair value through other comprehensive income (FVOCI) investment. At 31 December 20X7, the market price for the shares was $1.60. During February, 20X8 the authority fined Company X for using a toxic ingredient in one of its products resulting in the share price dropping dramatically to $1.10 per share. The drop in the investment has not been adjusted for in the financial statements of SLS as at 31 December 20X7. The drop in value is material. (5 marks) In January 20X8, the directors of SLS Pte Ltd publicly announced a plan to reduce the workforce by 10% because of worsening economic conditions. The restructuring would cost the company $500,000. Required: (5 marks) Discuss the effects of each of the above items on the financial statements of SLS Pte Ltd for the year ended 31 December 20X7 in accordance with FRS 10 Events after the Reporting Period. Provide journal entries, when necessary. -END OF PAPER