Question: Based on IAS 37 on contingent assets and liabilities, answer following case: There is a contract with Ministry of Health for 1,000,000 masks with a

Based on IAS 37 on contingent assets and liabilities, answer following case:
There is a contract with Ministry of Health for 1,000,000 masks with a selling price of $400. Chinese supplier indicates that as a result of a CONTINGENCY price went up from $230 to $330, which added to all internment costs leave product at a cost of $430 pesos per unit. You left a GUARANTEE of $28 million that would be charged in case of NON-DELIVERANCE with delivery of products. Are you facing an ONERIOUS CONTRACT? If yes, record your accounting and explain your reasoning.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Instructions: Attached is the contingency footnote for the Walt Disney Company.Included in footnote is a note about a lawsuit from Beef Products.There is a statement that the company is the defendant...

AUDITING & ASSURANCE SERVICES PAPER AdoreU Children Fashion Ltd Mini Audit Project QUESTIONS Part A: Professional Ethics and Audit Planning BACKGROUND INFORMATION Wallace & Davey Partners, Chartered...

You are the Financial Controller of Dry Limited, a construction company that has the following three incomplete construction contracts. Each contract is considered to contain only one performance...

QUESTION 3 Section 1 Whitebirk has met the definition of a SME in its jurisdiction and wishes to comply with the IFRS for SMEs. The entity wishes to seek advice on how it will deal with the following...

ANSWER ALL THE QUESTIONS Question 1 Khaki & Sons Limited (KSL) is a family business that deals in car spare parts. It is one of the largest dealers in car spare parts in Uganda. Since inception in...

Hi, I need help with this document. It is due 06/06/2017 11:59, Please help me! Project Six: Acquisition Contingencies Background In 2011, a construction materials manufacturing company (Construct)...

Statement of Financial Position as at December 31, 2012 December 31, June 30, 2012 2012 Note (Rupees in '000) Equity and liabilities Equity Share capital and reserves Share capital 6 51,000,000...

Figure 13.32 shows the Solver sensitivity report for Valencia Products. Using only the information in the sensitivity report, answer the following questions. a. Explain why the reduced cost for Speed...

n = 50, p = 0.4 Find the mean, variance, and standard deviation of the binomial distribution with the given values of n and p.

what is the difference between short term and long term financing for a business

A hula hoop and solid disc of equal radii are rolled, from rest and without slipping, down an incline plane. Which one will reach the bottom of the inclined plane first? Explain.

Using z-scores, a sample with M 5 37 and s 5 6 is standardized so that the new mean is M 5 50 and s 510. How does an individuals z-score in the new distribution compare with his/her z-score in the...

A distribution with m 5 35 and s 5 8 is being standardized so that the new mean and standard deviation will be m 5 50 and s 510. When the distribution is standardized, what value will be obtained for...

Find the z-score corresponding to a score of X 5 30 for each of the following distributions. a. m 5 50 and s 5 20 b. m 5 50 and s 5 10 c. m 5 20 and s 5 5 d. m 5 20 and s 5 2