15 Points You are the accountant in charge for auditing the books of C.J. Penney for the fiscal year ended March 31, 2020. During your audit you discover the following independent transactions related to subsequent (post-balance-sheet) events. All transactions are material in amount. The financial statements will not be issued until May 22, 2020. For the fiscal accounting year 2020, indicate whether the company should (a) adjust the financial statements, (b) disclose the information (GAAP disclosure) or (c) neither adjust nor disclose. 1. Change in the company's advertising agency. 2. Issuance of 100,000 shares of Preferred Stock on April 20, 2020. 3. Introduction of a new line of women's fashions. 4. On May 2, 2020, the company incurred a material loss of inventory due to flooding. 5. Settlement of a state employment discrimination case in excess of the amount recorded on March 31, 2020. 6. Announced on April 25, that they will merge with Giant Retailers, merger to be completed by July 2020. 7. A liability, estimated to be $850,000 at March 31, 2020, is settled on May 10, 2020 for $975,000. 8. Collection of an Accounts Receivable on April 6, 2020, that had been written off in January 2020. 9. Announcement by the company's CEO that he will be retiring later this year. 10. Purchase of new computer system. An IRS tax case is decided against the company on April 15, 2020. The amount accrued for taxes at the end of 2020 was $1.7M. The case increases the tax to $2.9M. 12. On April 27, 2020, one of their retail stores is destroyed by a fire. 13. 50,000 shares of Treasury stock are purchased on May 1, 2020. 14. On May 11, 2020, the company settles a litigation suit for $50M. As of March 31, 2020 $40M had been accrued. 15. The company co-signs (guarantees) for a debt of one of its suppliers