10 1 3 Accounting 2 Assignment 1 100 Question One 20 Fresh Limited A Manufacturer Of Toothpaste Was Taken To Cour 1 (241 KiB) Viewed 175 times
10 1 3 Accounting 2 Assignment 1 100 Question One 20 Fresh Limited A Manufacturer Of Toothpaste Was Taken To Cour 2 (272.42 KiB) Viewed 175 times
10.1.3 ACCOUNTING 2: ASSIGNMENT 1 [100] QUESTION ONE [20] Fresh Limited, a manufacturer of toothpaste, was taken to court over alleged defamation charges when the company accused a rival fBothpaste manufacturer of fraud. Before year end (31 December 2018), the lawyer of Fresh Limited advised that, although losing the case was unlikely, legal fees and settlement costs could amount to R900 000 in the event that the court case was lost. On 04 February 2019, the judge presiding over the case ruled that Fresh should pay R1 000 000 to the plaintiff as well as pay all of the plaintiff's legal fees, which amounted to R180 000. The financial statements had not yet been authorised for issue at the time of the court ruling. Required: Discuss how this information should be treated in the financial statements of Fresh Limited for the year ended 31 December 2018.
22 (1 of 4) .Q @ La QUESTION TWO [35] The newly qualified accountant of Parmesan Limited is busy finalising the financial statements of the company for the year ended 28 February 2019. Unfortunately, the accountant only remembers a few statements stated by his university lecturer as the venue in which the lecture took place was newly painted and he felt that watching the paint dry was likely to be more exciting than listening to an accounting lecture. He only remembered the following three statements: 1. The objective of IAS 12 is to account for current and future tax consequences the recovery of assets andmiabilities in the Statement of Financial Position.
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