Show how the following events should be reflected in the accounts at 31 December 2020 and describe audit procedures you would perform to verify them:

(a) Company A estimated profits on a construction contract that was 75 per cent complete at 31 December 2020 would amount to £100 000 and had taken up £75 000 in the profit and loss account on the portion of the contract certified as complete by a qualified surveyor.

On completion on 22 February 2021, company records show profit on the contract amounted to £30 000.

(b) Company B acquired non-current assets for £500 000 on 29 January 2021. The financial statements at 31 December 2020 showed noncurrent assets at cost less depreciation amounting to £250 000.

(c) Company C has shown in its financial statements at 31 December 2020 an investment in another company at a cost of £750 000. On 1 March 2021 there is a significant decline in prices on the Stock Exchange resulting from unexpected foreign exchange movements, resulting in a quoted value of £550 000.

(d) Company D is in dispute with a supplier as to the quality of goods supplied and has provided for the amount it believes to be correct (£100 000). The supplier has sued for the full amount invoiced

(£150 000), but on 11 March 2021 the company and supplier agree the liability out of court at £120 000.

(e) Company E had prepared draft financial statements at 30 November 2020, showing an acid test ratio of 0.85 to 1. (The normal acid test ratio in its industry is 1 to 1.) Shortly before 31 December 2020, the company sold trade investments for £450 000, incurring a loss of £100 000, and this had the effect of increasing the acid test ratio to 0.98 to 1. On 16 January 2021, the company repurchased the trade investments for £500 000.