Question 5 Vegas's current year end is March 31, 2018. Its financial statements were authorised for issue by its directors on May 6, 2018 and the AGM (annual general meeting) will be held on June 3, 2018. The following matters have been brought to your attention: i. On April 12, 2018 a fire completely destroyed the company's largest warehouse and the inventory it contained. The carrying amounts of the warehouse and the inventory were $10 million and $6 million respectively. It appears that the company has not updated the value of its insurance cover and only expects to be able to recover a maximum of $9 million from its insurers. Vegas's trading operations have been severely disrupted since the fire and it expects large trading losses for some time to come. ii. A single class of inventory held at another warehouse was valued at its cost of $460.000 at March 31, 2018. In April 2018 70% of this inventory was sold for $280,000 on which Vegas' sales staff earned a commission of 15% of the selling price. On May 18, 2018 the government announced tax changes which have the effect increasing Vegas's deferred tax liability by $650,000 as at March 31, 2018. Required: Explain the required treatment of the items (i) to (iii) by Vegas in its financial statements for the year ended 31 March 2018. Note: assume all items are material and are independent of each other