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    Post-Balance-Sheet Events

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    (Post-Balance-Sheet Events) 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.

    ______ 1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
    ______ 2. Introduction of a new product line.
    ______ 3. Loss of assembly plant due to fire.
    ______ 4. Sale of a significant portion of the company's assets.
    ______ 5. Retirement of the company president.
    ______ 6. Prolonged employee strike.
    ______ 7. Loss of a significant customer.
    ______ 8. Issuance of a significant number of shares of common stock.
    ______ 9. Material loss on a year-end receivable because of a customer's bankruptcy.
    ______ 10. Hiring of a new president.
    ______ 11. Settlement of prior year's litigation against the company.
    ______ 12. Merger with another company of comparable size.

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    https://brainmass.com/business/financial-distress-and-bankruptcy/post-balance-sheet-events-77908

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    (Post-Balance-Sheet Events) 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.

    ___A___ 1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.

    I think this should be a reason to adjust the statement since it in excess of what was expected, thus will change the numbers.

    _____C_ 2. Introduction of a new product ...

    Solution Summary

    This posting looks at a series of hypothetical situations and asks if a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

    $2.19

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