The 30 June 2020 financial statements of Alister Ltd have been prepared in draft form. The accounts have not yet been printed and sent to shareholders. Subsequent to the reporting date of 30 June 2020, the following events occur: (a) On 27 July 2020, the company received notification from the liquidator of a customer (ABC Mart) that, contrary to expectations, the payout to Alister Ltd will be 25% rather than 95% of the outstanding balance. Alister Ltd had written accounts receivable balance of $250,000 down by 20% at the reporting date (b) On 23 August 2020, a major production plant has been destroyed by fire Required: Classify the above events into adjusting and non-adjusting after reporting period events, justify your choice in accordance with IAS 10 / AASB 110 Events after the Reporting Period and discuss the appropriate accounting treatments. Journal entries must be provided if the adjustment is required. All the transactions above are material.
The 30 June 2020 financial statements of Alister Ltd have been prepared in draft form. The accounts have not yet been printed and sent to shareholders. Subsequent to the reporting date of 30 June 2020, the following events occur:
(a) On 27 July 2020, the company received notification from the liquidator of a customer (ABC Mart) that, contrary to expectations, the payout to Alister Ltd will be 25% rather than 95% of the outstanding balance. Alister Ltd had written
(b) On 23 August 2020, a major production plant has been destroyed by fire
Required:
Classify the above events into adjusting and non-adjusting after reporting period events, justify your choice in accordance with IAS 10 / AASB 110 Events after the Reporting Period and discuss the appropriate accounting treatments.
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