Solution-Elaborate the appropriate accounting treatment

Elaborate the appropriate accounting treatment

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Reference no: EM132588366

Khazanah Bhd is preparing its financial statements for the year ended 30 June 2020. The following matters are all outstanding at the year-end:

During the year ended 30 June 2020, one of Khazanah Bhd's employees was injured while working. The employee took legal action and sought damages of RM100,000. Khazanah Bhd has taken legal advice and is confident that the company will be held liable but the amount payable is questionable.
Khazanah Bhd has been practicing a policy of following customers to return goods within 7 days after sales. Khazanah Bhd estimates that such returns usually amount to 2% of sales. Sales in June 2020 were RM500,000.
Khazanah Bhd was facing litigation for damages from a customer for the supply of faulty goods on 1 June 2020. The amount for the claim was RM30,000. Khazanah Bhd's legal advisors considered that it was probable that this claim would succeed. The case is expected to be settled within one year.

Required:

Question 1: Elaborate the appropriate accounting treatment in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets for the above events.

Reference no: EM132588366

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Elaborate the appropriate accounting treatment

Reference no: EM132588366

Reference no: EM132588366

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