Question 2 (25 marks)
part i
(a) describe "notes to the financial statements". identify what is the accounting concept that
support for preparing the notes.
(3 marks)
(b) refer to question 1 of always fit company and assume the company's financial statements
were issued on march 25, 2019. state “yes” or “no” whether situation (1) to (4) below
require disclosure with the financial statements. if“yes”, identify the nature of disclosure. if
“no”, give the reason to support.
(1) on february 28, 2019, there was serious water leakage problem in several studio
classrooms. it was expected to take three months for repair.
(2) the information about the lender, the interest rate and the repayment schedule of the notes
payable.
(3) a customer fell down in studio's toilet and his arm was seriously injured and the company
was sued by the customer for medical compensation of $100,000 in 2018. the hearing date
is fixed on april 25, 2019.
(4) on february 27, 2019, the company's accountant found $300 cash was stolen by a part-
time staff.
(12 marks)

Table 1. shows the expected demand for the dvd at different suggested donation levels, and they can act as a single-price monopolist if they choose to. thereceipts will be used to fund gstcg supplies for their data collection and conservation work. at the end of each sea turtle nesting season, any excess funds are donated by the gstcg to a local non-profit sea turtle research and rehabilitation facility. table 1 suggested anticipated total marginal profit donation per number of dvd revenue revenue dvd request requests $19.00 0 $15.00 2 $9.50 4 $7.75 10 $3.00 15 $0.00 20 a. complete table 1 by computing the total revenue, marginal revenue, and profit columns. b. the president wants the gstcg to provide videos to generate the most possible donations (total revenue). what price, if any, is the president of the gstcg favoring and how many people will receive the dvd if this becomes the price of the suggested donation? explain your answer. c. the education outreach committee wants the gstcg to provide videos to the highest possible number of people. what price, if any, is the educational outreach committee favoring and how many people will receive the dvd if this becomes the price of the suggested donation? explain your answer. d. the treasurer of the gstcg wants the dvd program to be as efficient as possible so that the marginal revenue equals marginal cost. what price, if any, is the treasurer favoring and how many people will receive the dvd if this becomes the price of the suggested donation? explain your answer. e. the fundraising committee wants the dvd program to generate as much profit in donations as possible. what price, if any, is the fundraising committee favoring and how many people will receive the dvd if this becomes the price of the suggested donation? explain your answer.