Question
2.ABC Inc. is an hotel which were starting its business since 2015 in Jordan, and the following information related about year 2020: The tourism sector
2.ABC Inc. is an hotel which were starting its business since 2015 in Jordan, and the following information related about year 2020:
The tourism sector around the whole world was effected by Covid-19 which ends many entities and enforce these entities to declare bankruptcy because of the decrease of the whole sector which reached 75% comparing with year 2019. ABC announced their results for year 2020: decreasing in sales by 25%, current assets exceeded current liabilities with JOD 3 millions, net loss of JOD 1.8 millions. Due to the bad situation of many economic sectors, the local government decided to support and fund sectors that got effected by the Covid-19 situation including tourism sector, by make agreements and contracts to use hotels' facilities for medical purposes till next year with advance payments and reduces taxes for the same period. Also, the owners of ABC decided to support their business with extra fund that ensure business to continue its operations till next 18 months.
Based of previous information, ABC should: (1.5 )
issue an announcements in public that there is a possibilities to have a bankruptcy next period.
prepare its financial statements under going concern assumption.
prepare its financial statements under another assumption but not the going concern.
the previous information are not enough to decide how they should prepare its financial statements.
all positive and negative indicators are equal without any serious situation that effect the business
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