Answered: MFRS Standards.

Business

Accounting

MFRS Standards.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Sid Berhad year end is 31 December 2020. The accountant of Sid Berhad has asked for your opinion on the accounting treatment of the following items:

(iv) Sid Berhad is facing a claim due to a defective product for RM120,000 from a customer. The legal opinion is that the claim will succeed, but Sid will be able to reclaim 80% of the amount from Mentari Sdn Bhd, who supplied the malfunctioned product.

Required:

Advise Sid Berhad’s accountant on the accounting treatments for all the above- mentioned items. Your answer shall make reference to relevant MFRS Standards.

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