Question - You have been asked to provide advice to the management of Fiji Limited on treat the following items in the financial statements. The balance date is 30 June 2015. Ensure you include an explanation to support your advice. Assume that the financial statements are authorised for issue on 30 September 2015.
a) Fiji Limited spent $10 000 on a corporate box to entertain its client at a major sporting event.
b) Fiji Limited sales staff receive 5% commission on all sales made during the year ended 30 June 2015. In accordance with their contracts these amounts will not be paid to the employees until 31 October 2015.
c) Fiji Limited has struggled for several years to develop a new product and has spent $100 000 on product development and market research so far. In 2015 the decision was made to cease this development project.
d) Annual leave not yet taken by employees as at 30 June 2015 is $50 000.
e) Fiji Limited has incurred advertising expenditure $25 000. The company wants to record the expenditure as an asset so that it does not have an impact on the current year's profit.