How events should be dealt with in the financial statements

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Reference no: EM133011571

Avery Sdn. Bhd. has finalised its financial statements for the year ended 30 June 2021 and have been approved by the directors for issue on 1 September 2021.The following events, which are significant but not affecting the going concern status of the company, have occurred after the reporting period but before the financial statements were authorised for issue bythe directors:

(a) The Board of Directors has proposed a final dividend of RM0.15 per share for the ordinaryshares on 2 August 2021.
(b) Due to the Covid-19 pandemic, collections from trade receivables have been sluggish. TwinTrading, a customer, with an outstanding debt of RM250,000 as at 30 June 2021, has filed for bankruptcy on 15 August 2021 and will be able to settle only 40% of the outstanding debt.
(c) The Board of Directors has proposed a new issue of RM5 million ordinary shares to finance anew business line on 20 July 2021.
(d) As inventory turnover has been slow, a batch of obsolete inventories costing RM150,000 weresubsequently sold for RM100,000.
(e) Owing to a fire on 19 August 2021 a total loss of RM280,000 worth of office furniture andfittings has been reported.

Required:

Problem 1: Explain how each of the above events should be dealt with in the financial statements of Avery Sdn. Bhd. in accordance with IAS 10/MFRS 110 Events after the reporting period.

Reference no: EM133011571

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