The following are subsequent (post-statement of financial position) events.

1. Settlement of a federal tax case at a cost considerably higher than the amount expected at year end

2. Introduction of a new product line

3. Loss of an 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 common shares

9. Material loss on a year-end receivable because of a customer's bankruptcy

10. Hiring of a new president

11. Settlement of a prior year's litigation against the company for an amount less than the amount accrued

12. Merger with another company of similar size

Instructions:

For each of the above events, indicate whether the company should

(a) adjust the financial statements,

(b) disclose the event in notes to the financial statements, or

(c) neither adjust nor disclose.