Reference no: EM132586760

Question i). The Stead Company has a wholly-owned subsidiary, Guanaco. During the year to 30 June 20X7, Stead sold goods to Guanaco totalling Tk. 250,000. Guanaco paid Tk.135,000 of this debt before the year end and then encountered financial difficulties. Guanaco is not expected to be able to pay the remainder of the balance and therefore it has been provided against as uncollectible. Administration costs incurred as a result of Stead's credit controllers chasing the debt by have been calculated as Tk. 600. Under the minimum disclosure requirements of IAS24 Related party disclosures, which TWO of the following are required to be disclosed in relation to this arrangement?

A) The costs of the credit control department incurred in pursuing the debt

B) Details of any guarantees received in relation to the outstanding balance

C) The provision in relation to the debt being uncollectible

D) Future plans regarding trading arrangements with this subsidiary

Question ii). The Atrato Company carried out the following four transactions during the year ended 31 March 20X8. Which TWO of the four are related party transactions according to IAS24 Related Party Transactions?

A) Transferred goods from inventory to a shareholder owning 40% of the company's ordinary shares

B) Sold a company car to the wife of the managing director

C) Sold an asset to The Little Company, a sales agent

D) Took out a Tk.1 million bank loan

Question iii). According to IAS24 Related party disclosures, which ONE of the following is not a related party of The Parnaby Company?

A) A shareholder of The Parnaby Company owning 30% of the ordinary share capital

B) An entity providing banking facilities to The Parnaby Company

C) An associate of The Parnaby Company

D) Key management personnel of The Parnaby Company