Question

Days Ltd's financial year ended on 30 June 2020. The following events occurred between the end of the reporting period and the date the directors of Edwards Ltd expect to authorise the financial statements for issue:

1. On 3 July 2020, directors proposed a final dividend of $120,000.
2. On 15 July 2020, Days Ltd took delivery of building materials (inventory). Building materials were purchased from a Chinese manufacturer. Building materials were in transit at the end of the reporting period. An inspection of the building materials revealed significant flaws and the materials were returned to the supplier on 25 July 2020. Days Ltd is to receive a full refund of the $125,000 purchase price, which had been paid in advance on 27 June 2020.

REQUIRED

For each of the above material after-reporting-period events, state whether adjustment or disclosure is required in the 30 June 2020 financial statements. Assume the above events would not significantly affect the going-concern assumption for Days Ltd.

(No need for financial statement notes or any journal entries for adjustments.)

Answer 1