D. Construct the following extracts of financial statements in respect of the above transactions: i. Statement of Profit or Loss for the year ended 31 December 2021 Statement of Financial Position as at 31 December 2021
D. Construct the following extracts of financial statements in respect of the above transactions: i. Statement of Profit or Loss for the year ended 31 December 2021 Statement of Financial Position as at 31 December 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:B
The following events are to be considered upon finalizing the financial statements of
Squid Bhd for the year ended 31 December 2021:
i.
iii.
On 15 September 2021, the company was confronted with a legal suit of
RM1,000,000 from one of its staff due to an accident that caused major injury while
on duty. As at 31 December 2021, the case is still on-going and the next hearing
of the case will take place in February 2022. The company's legal advisor indicated
that there is 80% probability that the staff will win the case with a maximum claim
of RM800,000.
The company has caused severe pollution when the manufacturing plant
accidentally released its pollutant into the air. There was a legal requirement by
the government to protect the environment. Up until the end of the year, there was
no legal action brought against the company. It was estimated that the total cost
to rectify the environmental damages was RM1,800,000.
Required:
b.
Squid Bhd has a legal suit with one of its major suppliers which may result in a
receipt of compensation amounting to RM500,000. Its legal advisor is in the
opinion that there is a high possibility that the company will be awarded with the
compensation. However, it is dependent upon the verdict of the court.
Construct the following extracts of financial statements in respect of the above
transactions:
i.
ii.
Statement of Profit or Loss for the year ended 31 December 2021
Statement of Financial Position as at 31 December 2021
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education