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QUESTION ONE (15) The following are possible reimbursement scenarios: A. B. C. D. The retailer company provides the guarantee. The manufacturer provides the guarantee. The retailer is not liable in any way. The manufacturer provides the guarantee but the retailer company provides a guarantee irrespective of whether the manufacturer honours his guarantee. The manufacturer and retailer company provide a joint guarantee, whereby they share the costs of providing the guarantee: they jointly and severally accept responsibility for the guarantee. The manufacturer and retailer company provide a joint guarantee, whereby they share the costs of fulfilling the guarantee: the retailer is not liable for amounts that the manufacturer may fail to pay. E. Required: Explain whether the retailer must raise a provision (scenario A-E) for the cost of meeting future guarantee obligations (reimbursements). Include in your discussion relevant accounting concepts/ definitions.