The following information has been made available to you to assist in the preparation of the...

 

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The following information has been made available to you to assist in the preparation of the financial statements of Ant Ltd for the year ended 30 June 2018: 1. The company has been involved in a dispute with a government environment agency relating to the release of noxious gases from its manufacturing plant in early June 2018. An expert investigation was conducted to determine if the company was at fault. The investigator's report released on 1 August 2018 found Ant Ltd to be responsible for the release and damages amounting to $1 500 000 were payable by the company. 2. On 9 July 2018, the sales manager raised credit notes worth $30 000 relating to sales of faulty goods in the last 2 weeks of June 2018. 3. On 25 September 2018, the company received notification that a customer owing $130 000 had gone into liquidation. The liquidator advised that unsecured creditors are likely to receive a distribution of only 20c in the dollar. The liquidation was caused by a flood in July 2018 which destroyed the customer's operating plant and warehouse. The damage was not covered by insurance. Assume all events or transactions are material. Required In relation to the above events or transactions, prepare the necessary notes or general journal entries to comply with applicable accounting standards. The following information has been made available to you to assist in the preparation of the financial statements of Ant Ltd for the year ended 30 June 2018: 1. The company has been involved in a dispute with a government environment agency relating to the release of noxious gases from its manufacturing plant in early June 2018. An expert investigation was conducted to determine if the company was at fault. The investigator's report released on 1 August 2018 found Ant Ltd to be responsible for the release and damages amounting to $1 500 000 were payable by the company. 2. On 9 July 2018, the sales manager raised credit notes worth $30 000 relating to sales of faulty goods in the last 2 weeks of June 2018. 3. On 25 September 2018, the company received notification that a customer owing $130 000 had gone into liquidation. The liquidator advised that unsecured creditors are likely to receive a distribution of only 20c in the dollar. The liquidation was caused by a flood in July 2018 which destroyed the customer's operating plant and warehouse. The damage was not covered by insurance. Assume all events or transactions are material. Required In relation to the above events or transactions, prepare the necessary notes or general journal entries to comply with applicable accounting standards.

Answer rating: 100% (QA)

1According to International Financial reporting standards IFRS contingencies should be disclosed using notes Contingencies are situations or conditions the outcome of which profit or loss would be det... View the full answer