Issue 3: The directors of Chancer plc have identified the following events that occurred after 31...

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Issue 3: The directors of Chancer plc have identified the following events that occurred after 31 December 2019: On 3 January 2020, a fraud committed by the accounts receivable controller was discovered. The fraud resulted in trade receivables recorded in November 2019 being overstated by £30,000. On 4 January 2020, a fire destroyed machinery with a carrying value of £15,000 in the company's statement of financial position at 31 December 2019. The machinery was not insured. Requirement ● Explain how Chancer plc should account for these events in its financial statements for the year ended 31 December 2019 in accordance with extant international financial reporting standards. 5 Marks Issue 4: On 20 December 2019, the directors of Chancer plc decided to close down one of the company's divisions. However, due to the Christmas holidays, the decision was not communicated to any of those affected and no other steps were taken to implement the decision. It is expected that the closure of the division will cost £50,000. Requirement Explain how Chancer plc should account for this in its financial statements for the year ended 31 December 2019 in accordance with extant international financial reporting standards. 5 Marks Total 25 Marks Issue 3: The directors of Chancer plc have identified the following events that occurred after 31 December 2019: On 3 January 2020, a fraud committed by the accounts receivable controller was discovered. The fraud resulted in trade receivables recorded in November 2019 being overstated by £30,000. On 4 January 2020, a fire destroyed machinery with a carrying value of £15,000 in the company's statement of financial position at 31 December 2019. The machinery was not insured. Requirement ● Explain how Chancer plc should account for these events in its financial statements for the year ended 31 December 2019 in accordance with extant international financial reporting standards. 5 Marks Issue 4: On 20 December 2019, the directors of Chancer plc decided to close down one of the company's divisions. However, due to the Christmas holidays, the decision was not communicated to any of those affected and no other steps were taken to implement the decision. It is expected that the closure of the division will cost £50,000. Requirement Explain how Chancer plc should account for this in its financial statements for the year ended 31 December 2019 in accordance with extant international financial reporting standards. 5 Marks Total 25 Marks

Answer rating: 100% (QA)

Step 12 Issue 1 Chancer plc should account for the sale of the building in its financial statements for the year ended 31 December 2019 in accordance ... View the full answer