Question Two You are the financial accountant of Zambezi Ltd, a firm that manufactures and installs kitchen fittings. During the financial year ended 31st December, 2013 Zambezi Ltd refurbished its showroom in a large shopping complex in order to display the latest range of kitchen fittings. The cost of this refurbishment amounted to K450,000. Zambezi Ltd has been expanding and the current order book indicates an increase of 15% compared to the same period during the last financial year. The gross margin has always remained constant and the company generated a net income before tax for the current year of approximately K5 million. The managing director wishes to write off the cost of the refurbishment as a selling expense in the income statement for the current period. Required Write a memorandum to the managing director indicating in details the appropriate accounting treatment of the above expenditure in the financial statement of Zambezi Ltd for the financial year ended 31st December, 2013 . Your answer should refer to the relevant definitions and the necessary legal and accounting requirements. 10 Marks