The following events, which are considered to be material, occurred after the date of the statement of
Question:
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 authorisation 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.
(b) The liquidator of Bogmore Limited announced his intention to pay a dividend of 50 cent in the € to unsecured creditors. Three years previously, Bellamy Limited had provided for the full debt owing by Bogmore Limited at that time.
(c) A fire in one of Bellamy Limited’s warehouses caused €50,000 worth of damage to inventory that 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.
Requirement Indicate to what extent the foregoing events should affect the accounts of Bellamy Limited. State the reasons that support your conclusions
Step by Step Answer:
International Financial Accounting And Reporting
ISBN: 9781912350025
6th Edition
Authors: Ciaran Connolly