You are the accountant of Tulip Enterprise Co and are preparing the financial statements for the year-ended
Question:
You are the accountant of Tulip Enterprise Co and are preparing the financial statements for the year-ended 30 September 2017. The financial statements are expected to be issued on Monday 29 November 2017. Today’s date is 22 November 2017. You have been made aware of the On 20 October 2017, a piece of assets of the entity was destroyed by fire. It was properly accounted for to date.
1. On 5 November 2017, a customer filed litigation against the company for compromising product quality with price.
2. On 19 November 2017, a customer ceased trading due to financial difficulties owing Tk. 2,500 as the financial statements are needed for the board meeting on 22 November 2017.
Required:
Indicate how each of the above events should be treated in the books of accounts
a) Adjusting subsequent events
b) Non adjusting subsequent events
Expert Answer:
Adjusting events are those events that provide evidence of occurence on the reporting date Whereas n... View the full answer
