The accountant of Blue Ltd discovered the following documents in a file marked ‘not yet dealt with’ at the company’s year end of 31 December Year Explain the accounting treatment required for each.

(a) A supplier’s invoice for £300 was received on 21 December Year 1 with respect to goods received on 18 December Year 1.

(b) Another supplier’s invoice for £400 was received on 28 December with respect to goods received on 5 January Year 2.

(c) The finance director had written a note ‘Board of Directors on 10 December Year 1 agreed to purchase new machinery in January Year 2 at a cost of £500,000’.

(d) A letter had been received from a customer in December 2001 claiming a refund of £500 with respect to defective goods. The sales manager of Blue Ltd had admitted that the goods were defective and had agreed to pay the refund. However, no payment had been made at 31 December Year 1.