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. Assume the financial statements have not yet been issued. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Subsequent (Post-Balance-Sheet) Events Settlement of prior year's litigation against the company at no cost. Sale of 10% of the company's assets. Acquire a significant customer. Filing for protection under Chapter 11 of the Bankruptcy Code. Loss of an overseas plant due to expropriation. Dismissal of the company president. Issuance of a significant number of shares of preferred stock. Prolonged employee strike. Charges of fraud filed against a vice-president. Acquisition of another company with sales of approximately one-half of the company.
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. Assume the financial statements have not yet been issued. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Subsequent (Post-Balance-Sheet) Events Settlement of prior year's litigation against the company at no cost. Sale of 10% of the company's assets. Acquire a significant customer. Filing for protection under Chapter 11 of the Bankruptcy Code. Loss of an overseas plant due to expropriation. Dismissal of the company president. Issuance of a significant number of shares of preferred stock. Prolonged employee strike. Charges of fraud filed against a vice-president. Acquisition of another company with sales of approximately one-half of the company.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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. Assume the financial statements have
not yet been issued.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Subsequent (Post-Balance-Sheet) Events
Settlement of prior year's litigation against the company at no cost.
Sale of 10% of the company's assets.
Acquire a significant customer.
Filing for protection under Chapter 11 of the Bankruptcy Code.
Loss of an overseas plant due to expropriation.
Dismissal of the company president.
Issuance of a significant number of shares of preferred stock.
Prolonged employee strike.
Charges of fraud filed against a vice-president.
10. Acquisition of another company with sales of approximately one-half of the company.
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