Remap Company Limited's financial year ended 2017 December 31. On 2018 February 28, two members of the Board of Directors of Remlap, a publicly traded company, authorized shares for Issue

In 2017 August, the company sold products, on credit, which amount to $700 000. At end of the financial year, to senior management's best knowledge, the debtor could repay said debt. In 2018 February, however, when the financial statements were being finalized, Remlap was informed that said customer had gone bankrupt due to significant debts, and trade receivables were deemed worthless.

Dividends of $120 000 for the financial year was declared on 2018 January 02 and paid on 2018

January 24. The Accountant included those dividends in the financial statements at the end of

2017 December. Also, on 2018 February 14, a fire destroyed one of the company's plants which had a carrying amount of $35 000 000 at 2107 December 31. Remlap did not have insurance against fire, but still operated as a going concern.

Required

Explain, to the Accountant, the appropriate treatment of events outlined above

Answer rating: 100% (QA)

The events outlined above require the following treatment in Remlap Company Limiteds financial state... View the full answer