Reference no: EM133046316

Question - The following material events relate to Tat Sing Bhd. (Tat Sing) whose year end is 31 March 2021. It is expected that its financial statements will be ready for issue on 1 July 2021.

(a) On 8 April 2021, one of Tat Sing's accountants left the company suddenly. On further investigation, the company realised that this employee had been paying himself money from the bank account in relation to false rental invoices. The amount of the overpayment was found to be RM96,000. With the help of the police, the accountant was tracked down and repaid all of the money on 15 May 2021.

(b) There was a fire at the company's warehouse on 19 May 2021 where inventory at the value of RM350,000 was destroyed. It transpired that the inventory in the warehouse was under-insured by 75%.

(c) An announcement was made on 7 April 2021 that one of the customers, Ocean Sdn. Bhd. (Ocean), had gone into liquidation. The liquidator estimated that Tat Sing will be able to receive RM0.40 in return of every RM1.00 of debt. As at 31 March 2021, the receivable in Tat Sing's accounts in respect of Ocean stood at RM95,000.

Required - Discuss how each of the above events should be dealt with in the financial statements of Tat Sing Bhd. for the year ended 31 March 2021.