AC 302 WEEK 10 Exercise 24 Question 2
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For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.
Sr. No. Subsequent (Post-Balance-Sheet) Events
1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
2. Introduction of a new product line.
3. Loss of assembly plant due to fire.
4. Sale of a significant portion of the company- assets.
5. Retirement of the company president.
6. Prolonged employee strike.
7. Loss of a significant customer.
8. Issuance of a significant number of shares of common stock.
9. Material loss on a year-end receivable because of a customer- bankruptcy.
10. Hiring of a new president.
11. Settlement of prior year- litigation against the company (no loss was accrued).
12. Merger with another company of comparable size.
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