Mega Company has a December 31 year-end. All of the following events occurred between December 31, 2021, and March 1, 2022 when its financial statements were issued. Which is a recognized subsequent event? Answer a. A key supplier declared bankruptcy as a result of uninsured flood damage that occurred in February 2022. b. A lawsuit for which the company had accrued a contingent liability at December 31,2021 of $1,000,000 was settled for $900,000 in January 2022 c. Employees at one of the company’s plants went on strike in late January 2022. d. Additional shares of 3%, $100 par preferred stock were issued for $5,000,000 in February 2022.
Mega Company has a December 31 year-end. All of the following events occurred between December 31, 2021, and March 1, 2022 when its financial statements were issued. Which is a recognized subsequent event? Answer a. A key supplier declared bankruptcy as a result of uninsured flood damage that occurred in February 2022. b. A lawsuit for which the company had accrued a contingent liability at December 31,2021 of $1,000,000 was settled for $900,000 in January 2022 c. Employees at one of the company’s plants went on strike in late January 2022. d. Additional shares of 3%, $100 par preferred stock were issued for $5,000,000 in February 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Mega Company has a December 31 year-end. All of the following events occurred between December 31, 2021, and March 1, 2022 when its financial statements were issued. Which is a recognized subsequent event?
Answer
a.
A key supplier declared bankruptcy as a result of uninsured flood damage that occurred in February 2022.
b.
A lawsuit for which the company had accrued a
c.
Employees at one of the company’s plants went on strike in late January 2022.
d.
Additional shares of 3%, $100 par
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