ColdIce Limited presented their financial statements for the year ended $28$ February $2018$ to the

board of directors on $31$ May $2018$ for approval.

The following events have taken place after the reporting period:

$$ The accountant of Cold Ice Limited received notification on $01$ April $2018$ that DryIce

limited$,$ a customer of the company, was in liquidation and that ColdIce Limited will be

paid $40\%$ of the outstanding debt. It was further determined that ColdIce Limited was

aware that DryIce Limited was experiencing financial difficulties at year end. The

amount owed by DryIce Limited was R $60000$ which was included in Trade

Receivables at reporting date.

$$ During March $2018,$ a water pipe burst causing damage to the warehouse and to

stock, amounting to R $350000$ and R $140000$ respectively. The damage was not

covered by the insurance policy.

$$ A customer sued ColdIce Limited on $15$ March $2018$ for selling substandard products

to them during $2017.$ ColdIce Limited appointed attorneys to defend the action. Initial

legal costs amounted to R $25000.$ The attorneys advised ColdIce Limited that it was

too early to determine the costs of the case or the outcome.

Required:

$4\mathrm{.}1.$ For each of the above$-$mentioned cases, state whether it is an adjusting event or a

non$-$adjusting event after the reporting period. Provide reasons to substantiate your

answer $(9)$

$3$

$4\mathrm{.}2.$ Explain the disclosure that is required in each case.

Answer rating: 100% (QA)

41 For each of the mentioned cases whether they are adjusting events or nonadjusting events after the reporting period are as follows a DryIce Limited ... View the full answer