Sylvia carries on business as a baker trading as The French Confection. When finalising the accounts of The French Confection for the year ending on 31 March 2012, she seeks your advice on whether she should account for the following claims on her resources (i.e. record them in the ledgers and report them in the Statement of income and/or Statement of financial position):

(a) She is planning to acquire a new convector oven for £7,500 on 1 April 2012.

(b) She hired the services of a pastry cook in September 2011 on the understanding that the chef would be trained in oriental cuisine and this training is expected to cost £9,000.

(c) She acquired a kitchen grinder for £12,000 on 1.7.2011, intending to use it for five years. The manufacturers advised her that its motor would require replacement annually at a cost of £500.

(d) The Public Health Inspector notified her on 1 March 2012 that The French Confection was required to pay a penalty of £1,000 for a minor breach of health and safety laws.

(e) One of her regular customers, a reputable restaurant, complained on 10 March 2012 that a consignment of pastries, invoiced to the restaurant at £14,000, was not fresh. To defend her reputation as a supplier of fresh pastries Sylvia’s policy usually is to make a refund of 125% of the value of any defective products.

Required: 

Explain how each transaction/event stated as (a) to (e) should be accounted for and reported in the Statement of income for the year ended 31 March 2012 and the Statement of financial position as at that date.