The following events which are considered to be material occurred after the date of the statement of financial position of Bellamy Limited but before the completion of its financial statements.

(a) Cronser Limited, owing €20,000 to Bellamy Limited at the date of the statement of financial position, went into liquidation and available information suggests that there is little prospect of a dividend for unsecured creditors. The debt had increased to €30,000 at the date of the winding-up order;

The liquidator of Begore Limited announced his intention to pay a dividend of 50 cents in the € to unsecured creditors. Three years previously, Bellamy Limited had provided for the full debt owing by Bogor Limited at that time.

(b) SS Requirement Indicate to what extent the foregoing events should affect the accounts of Bellamy Limited. State the reasons that support your conclusions.

(c) A fire in one of Bellamy Limited’s warehouses caused €50,000 worth of damage to inventory which had cost €80,000. This damage had not been covered by insurance.

Of the damaged inventory, approximately 75% was in inventory at the date of the statement of financial position, the remaining 25% having been purchased after the date of the statement of financial position.