Imports Inc. is a U.S. public company and has a calendar year-end. Imports purchases auto parts from Korea and sells them to domestic car dealerships around the U.S. On November 1, 20X1, Imports received a shipment on account of $400,000 worth of shocks and struts from its Korean supplier. Unfortunately, the parts were defective. Faced with commitments to deliver working parts to its own customers, Imports paid $200,000 on 11/15/X1 to a domestic third party to fix the defective parts. However, even after the repair effort, the shocks and struts remained defective. Imports has not yet paid the Korean company for the parts purchased. In early December, Imports requested repayment from the manufacturer for its costs of repair ($200,000). However, when the manufacturer refused to pay, Imports sued the manufacturer on 12/15/X1 for its amount invested ($200,000) plus an additional $100,000 for lost revenues. On February 2, 20X2, a U.S. court ruled in favor of Imports, awarding Imports Inc. $300,000, payable ratably in three monthly installments to begin on 2/15/X2.

Required:

1. Identify Import Inc.’s researchable questions as of 12/31/X1 related to this series of issues.

2. Identify Import Inc.’s researchable questions as of 2/2/X2 related to this series of issues.

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