2. Casemiro Bhd is a company engaged in manufacturing spare parts for the automotive industry....
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2. Casemiro Bhd is a company engaged in manufacturing spare parts for the automotive industry. The directors authorized issueance of the companys financial statements for the year ended 20 June 2020 on 15October 2020.
The following matters were considered by the directors of Casemiro Bhd in the preparation of the financial statements for the year ended 30 June 2020.
Required
Explain how each of the below events should be treated inthe financial statements of Casemiro Bhd for the year ended30 June 2020.
a) Casemiro Bhd manufactures steering rods solely for Viva Limited, a customer in Japan, and sells themat 20% above cost. On 10 September 2020, VivaLimited was placed in liquidation. On 30 June 202, Viva Limited owed Casemiro Bhd RM1,250,000 and inventories of steering rods were carried at a cost of RM750,000. The unsecured creditors of Viva Limited are expected to recover 20% of all amounts due. On5 October 2020, Casemiro Bhd finalized a
contract with a Taiwanese company to sell the stock ofsteering rods at a price 30% below their cost.
2. Casemiro Bhd is a company engaged in manufacturing spare parts for the automotive industry. The directors authorized issueance of the companys financial statements for the year ended 20 June 2020 on 15October 2020.
The following matters were considered by the directors of Casemiro Bhd in the preparation of the financial statements for the year ended 30 June 2020.
Required
Explain how each of the below events should be treated inthe financial statements of Casemiro Bhd for the year ended30 June 2020.
a) Casemiro Bhd manufactures steering rods solely for Viva Limited, a customer in Japan, and sells themat 20% above cost. On 10 September 2020, VivaLimited was placed in liquidation. On 30 June 202, Viva Limited owed Casemiro Bhd RM1,250,000 and inventories of steering rods were carried at a cost of RM750,000. The unsecured creditors of Viva Limited are expected to recover 20% of all amounts due. On5 October 2020, Casemiro Bhd finalized a
contract with a Taiwanese company to sell the stock ofsteering rods at a price 30% below their cost.
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