CCN2101 2018/19 S1 Assignment 1 Question 2 (25 marks Part I (a) Explain the criteria and the purpose of adequate disclosure for financial statements. (3 marks) (b) Refer to Question 1 of All Star Company and assume the Company's financial statements were issued on March 15, 2018. State "Yes" or "No" whether situation (1) to (4) below require disclosure with the financial statements. If "Yes", please identify the nature of disclosure; if "No", please give the reasorn. (1) The Company purchased all supplies from All Moon Company, which is owned by one of the directors of the company. (2) The Company ordered a new model of car cleaning machine in February, 2018. The machine can shorten the cleaning time and the company owners expected total revenue will increase by 80% in 2018. (3) The Company will close three branches, representing 30% of the total 2017 revenue, in the second quarter of 2018 as renewal of rental contracts was rejected by the landlords. (4) On February 27, 2018, the Company's accountant found $300 cash was stolen by a part- time staff. (12 marks)