4 (22 marks) Each of the following unrelated subsequent events took place at different audit clients of your firm. The following events took place at the various clients between the date of the financial statements and the date of the auditor's report: 1. Your client, Oil of Olives Ltd, has been sued by a customer after the customer had a severe allergic reaction to skin products. Oil of Olives Ltd has a 31 December 2020 year-end and the customer filed the lawsuit on 15 January 2021, after the incident occurred during the first week of January. The incident seems to be isolated and the amount of-the lawsuit is not material. (2) 2. Cupic-Foods (Pty) Ltd received a complaint shortly after year-end, of a baby falling ill from their new range of baby foods (produced before year-end). After having lab tests done on the product line, it was determined that dangerous chemicals are present in the food, which can cause babies to become mildly ill (not life-threatening). The decision has since been made to remove all the inventory related to this product line from supermarket shelves and to write off the inventory. The amount of the inventory comprises 50% of the company's stock held at year-end. (3) 3. Legislation was passed which immediately lifted import restrictions on the type of product manufactured and sold by your client Rubtek (Pty) Ltd. Within a short period, demand for your client's product dropped as the market was flooded with cheap imports of a similar product from China. Rubtek (Pty) Ltd were forced to drop the selling price of its product drastically. (2) 4. The share price of Anglometal Ltd fell sharply on the JSE declining by nearly 30% of what the share price had been at 31 March 2021. At its financial yearend, 31 March 2021, your client Conveyers (Pty) Ltd, a manufacturing company, held shares in Anglometal Ltd as a long-term investment. (2) 5. A major design defect was discovered in the safety mechanisms of a number of panel presses manufactured and sold by your client Giantpress (Pty) Ltd. This will result in recalls and modifications having to be made. The directors are also of the opinion that a number of lawsuits may follow. All presses must be sold with a safety guarantee. (2) 6. An explosion at your client's premises shortly after year end resulted in the impairment of an expensive piece of manufacturing equipment. The directors made the decision to account for the impairment at 31 March 2021, the company's financial year-end. (2) 7. A major debtor of Medipowder (Pty) Ltd, one of your clients, was declared insolvent. Medipowder (Pty) Ltd anticipated this and had included an amount equal to 50% of the debt in the allowance for bad debts at year-end. Early estimates from the liquidator are that creditors will receive only 10% in the rand if they are lucky. (2) 8. Maxmines Ltd a client which operates a mine in a foreign African country, was notified that certain non-current assets on the mine had been totally destroyed during drawn out strike action. Although the assets destroyed have been clearly identified, exact details of when they were destroyed have not been established, (2) 9. Norton (Pty) Ltd, a large engineering company, was advised by their lawyers that a group of 20 employees intend to bring a civil action against the company for failure to provide adequate safety precautions in the workplace. The group of 20 contend that this has left them with impaired hearing. Although no details have been provided, for example the amount of the claim, the directors of Norton (Pty) Ltd have indicated that they will contest any action. (2) 10. At a meeting of the directors (held three weeks after the financial year-end) a decision was made to propose a dividend for the financial year 2021 of R7,50 a share. The dividend must be approved at the AGM to be held on 1 May 2021. YOU ARE REQUIRED TO: (3) Indicate, giving reasons, how each of the above (1-10) should be treated, if at all, in the financial statements of the respective companies. (22)