Toy World Ltd operates a chain of toy shops. The chief accountant has come to you for advice about two financial reporting issues that have been raised at a meeting of the board of directors. Your advice should be justified by reference to Framework 2014 (a) The board of directors has decided to restructure its operations in Queensland. This decision has been announced to the Australian Securities Exchange. As a result of the restructuring, some employees will be made redundant and some leases will be terminated as will some other contracts entered into by the in Queensland. The chief accountant is proposing the following journal entry:

Restructuring expense Dr Liability for restructuring Cr

(b) The company has placed an order with a toy manufacturer in China. The amount of the order is $750000. The toys are to be built to Australian specification standards by the manufacturer in China. The company has paid a deposit of $75000. which will be forfeited in the event of cancellation. The board of directors says there is no intention of cancelling the contract. The chief accountant is proposing the following journal entry: Inventory of toys Dr Cash at bank Cr Accounts payable Cr