1.

2.

3.

Identify the liability from the information for each part.

Discuss how the liability must be recognised and measured.

Provide the journal entries for each part for the year ended 30 April 2023.

4.

Please note:

• Ignore any VAT or income tax implications.
• Journal narrations are not required.
• Round all amounts to the nearest Rand.
• Show all the necessary calculations as part of your answer

Present and disclose the liability as identified in each part in the financial statements for the year ended 30 April 2023.

During the year, Khoza Bazaar Ltd (KB) purchased Primo drink products from a Brazilian supplier for resale at its resort. However, KB was unaware that the Brazilian supplier supplied fake Primo drink products which had harmful ingredients. This resulted in some of KB's customers getting sick while others were hospitalised. The news initially broke on 8 February 2023 when Yorisha Hugo was hospitalised. Thereafter, 11 other customers came forward alleging that they became ill allegedly due to the consumption of the fake Primo drink products. Yorisha Hugo and the additional 11 customers (i.e. 12 customers) lodged a joint legal lawsuit against KB on 15 February 2023. KB engaged their lawyers immediately. The lawyers completed their investigations on 22 March 2023.