BThe following events are to be considered upon finalizing the financial statements ofSquid Bhd for the year ended 31 December 2021:i.iii.On 15 September 2021, the company was confronted with a legal suit ofRM1,000,000 from one of its staff due to an accident that caused major injury whileon duty. As at 31 December 2021, the case is still on-going and the next hearingof the case will take place in February 2022. The company's legal advisor indicatedthat there is 80% probability that the staff will win the case with a maximum claimof RM800,000.The company has caused severe pollution when the manufacturing plantaccidentally released its pollutant into the air. There was a legal requirement bythe government to protect the environment. Up until the end of the year, there wasno legal action brought against the company. It was estimated that the total costto rectify the environmental damages was RM1,800,000.Required:b.Squid Bhd has a legal suit with one of its major suppliers which may result in areceipt of compensation amounting to RM500,000. Its legal advisor is in theopinion that there is a high possibility that the company will be awarded with thecompensation. However, it is dependent upon the verdict of the court.Construct the following extracts of financial statements in respect of the abovetransactions:i.ii.Statement of Profit or Loss for the year ended 31 December 2021Statement of Financial Position as at 31 December 2021

we have to give answer considering standard of accounting on provision, contingent liability and…

D. Construct the following extracts of financial statements in respect of the above transactions: i. Statement of Profit or Loss for the year ended 31 December 2021 Statement of Financial Position as at 31 December 2021

D. Construct the following extracts of financial statements in respect of the above transactions: i. Statement of Profit or Loss for the year ended 31 December 2021 Statement of Financial Position as at 31 December 2021

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 24E

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