Question
In: Accounting
Events after the reporting period ★LO6 Cat Ltd operates a fleet of fishing trawlers. The following...
Events after the reporting period ★LO6
Cat Ltd operates a fleet of fishing trawlers. The following events took place after the end of the reporting period, 30 June 2019, but before the date the accounts were authorised, 15 September 2019.
On 17 July 2019, Cat Ltd’s main fishing fleet was sunk during a freak storm. Insurance will cover the replacement of the vessels but lost sales representing $550 000 in profits are not covered.
On 19 July 2019 Cat Ltd took delivery of a fishing net for its prawn trawler. The net was purchased from a UK manufacturer on delivered duty paid shipping terms and was in transit at the end of the reporting period. An inspection of the net revealed significant structural flaws and the net was returned to the supplier on 28 July 2019. Cat Ltd is to receive a full refund of the $650 000 purchase price which had been paid in advance on 29 June 2019.
On 29 August 2019 a lawsuit was lodged against the company by the families of crew members drowned in the 17 July storm, alleging negligence, and claiming $4 million in damages. No date has as yet been set for the court hearing.
On 1 September 2019 the directors resolved to issue to the public 10 000, 5% debentures of $10 each, payable $5 on application and $5 on allotment.
Required
Classify each event as an adjusting or non-adjusting event after the end of the reporting period. Explain your decisions.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Why it is important to review events after reporting period?
Why it is
important to review events after reporting period?
Problem 1: Post-Period Reporting The objective of IAS 10 Events after the Reporting Period is to...
Problem 1: Post-Period Reporting The objective of IAS 10 Events
after the Reporting Period is to prescribe the treatment of events
that occur after an entity’s reporting period has ended. Required:
Define the period to which IAS 10 relates and distinguish between
adjusting and non-adjusting events.
IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those events that...
IAS 10: Events after the Reporting Period addresses two
issues: adjusting events, namely, those events that provide
evidence of conditions that existed at the end of the reporting
period and non-adjusting events: which are those events that are
indicative of conditions that arose after the reporting period that
need to be reflected in the financial statements. Amounts
recognized in the financial statements are adjusted to reflect
adjusting events, but only disclosures are required for material
non-adjusting events. Management’s judgment is...
IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those events that...
IAS 10: Events after the Reporting Period addresses two
issues: adjusting events, namely, those events that provide
evidence of conditions that existed at the end of the reporting
period and non-adjusting events: which are those events that are
indicative of conditions that arose after the reporting period that
need to be reflected in the financial statements. Amounts
recognized in the financial statements are adjusted to reflect
adjusting events, but only disclosures are required for material
non-adjusting events. Management’s judgment is...
IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those events that...
IAS 10: Events after the Reporting Period addresses
two issues: adjusting events, namely, those events that provide
evidence of conditions that existed at the end of the reporting
period and non-adjusting events: which are those events that are
indicative of conditions that arose after the reporting period that
need to be reflected in the financial statements. Amounts
recognized in the financial statements are adjusted to reflect
adjusting events, but only disclosures are required for material
non-adjusting events. Management’s judgment is...
Exercise 6A-3 Cost Behavior; High-Low Method [LO6-10] Hoi Chong Transport, Ltd., operates a fleet of delivery...
Exercise 6A-3 Cost Behavior; High-Low Method [LO6-10]
Hoi Chong Transport, Ltd., operates a fleet of delivery trucks
in Singapore. The company has determined that if a truck is driven
96,000 kilometers during a year, the average operating cost is 10.3
cents per kilometer. If a truck is driven only 64,000 kilometers
during a year, the average operating cost increases to 11.5 cents
per kilometer.
Required:
1. Using the high-low method, estimate the variable operating
cost per kilometer and the annual...
Question 1 IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those...
Question 1
IAS 10: Events after the Reporting Period addresses two
issues: adjusting events, namely, those events that provide
evidence of conditions that existed at the end of the reporting
period and non-adjusting events: which are those events that are
indicative of conditions that arose after the reporting period that
need to be reflected in the financial statements. Amounts
recognized in the financial statements are adjusted to reflect
adjusting events, but only disclosures are required for material
non-adjusting events. Management’s...
Question 1 IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those...
Question 1
IAS 10: Events after the Reporting Period addresses two
issues: adjusting events, namely, those events that provide
evidence of conditions that existed at the end of the reporting
period and non-adjusting events: which are those events that are
indicative of conditions that arose after the reporting period that
need to be reflected in the financial statements. Amounts
recognized in the financial statements are adjusted to reflect
adjusting events, but only disclosures are required for material
non-adjusting events. Management’s...
Question 1 IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those...
Question 1
IAS 10: Events after the Reporting Period addresses two issues:
adjusting events, namely, those events that provide evidence of
conditions that existed at the end of the reporting period and
non-adjusting events: which are those events that are indicative of
conditions that arose after the reporting period that need to be
reflected in the financial statements. Amounts recognized in the
financial statements are adjusted to reflect adjusting events, but
only disclosures are required for material non-adjusting events.
Management’s...
Question 1 IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those...
Question 1
IAS
10: Events after the Reporting Period addresses two issues:
adjusting events, namely, those events that provide evidence of
conditions that existed at the end of the reporting period and
non-adjusting events: which are those events that are indicative of
conditions that arose after the reporting period that need to be
reflected in the financial statements. Amounts recognized in the
financial statements are adjusted to reflect adjusting events, but
only disclosures are required for material non-adjusting events.
Management’s...
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