Sid Berhad year end is 31 December 2020. The accountant of Sid Berhad has asked for your opinion on the accounting treatment of the following items:

(iv) Sid Berhad is facing a claim due to a defective product for RM120,000 from a customer. The legal opinion is that the claim will succeed, but Sid will be able to reclaim 80% of the amount from Mentari Sdn Bhd, who supplied the malfunctioned product.

Required:

Advise Sid Berhads accountant on the accounting treatments for all the above- mentioned items. Your answer shall make reference to relevant MFRS Standards.