c$)$ If S&G were to adopt method three:

i$.$ Provide the journal entries $($hypothetical in this case$)$ required to recognise the contingent assets and contingent liabilities. $(2$ marks$)$

ii$.$ What will the income statement and balance sheet look like after these adjustments? Consider contingent assets and contingent liabilities separately, by providing two scenarios: one where only contingent assets are recognised and one where only contingent liabilities are recognised. Do not offset contingent assets and liabilities. $(5$ marks$)$

iii. Would adopting method three result in a more credible presentation of S&G$$s financial performance and financial position? $(3$ marks$)$

iv$.$ Under what circumstances would contingent assets and contingent liabilities be instead considered provisions? $(2$ marks$)$

d$)$ Finally, review the next two annual reports after the annual report you selected for this question. Did S&G follow up these contingent assets and contingent liabilities in the next one or two years? If yes, what changes did they make to the contingent assets and contingent liabilities, if any? $(6$ marks total. Note: this question is based on S&G$$s actual published annual reports. It is not connected to the above questions about adopting methods $1,2$ or $3.)$