Question
A fire occurred in one of the Experience Plus theatres, located in a building owned by ETI, two weeks after year end. Damages were significant,
A fire occurred in one of the Experience Plus theatres, located in a building owned by ETI, two weeks after year end. Damages were significant, and, more importantly, several patrons suffered from smoke inhalation and had to be hospitalized. A government inspection performed after the fire found that faulty wiring was the cause of the fire. It also reported that the emergency exit doors in the theatres were not properly marked. Costs to repair the damage caused by the fire totalled $150,000 and included bringing the wiring and signage up to meet safety code.
To maintain its reputation, ETI made payments totaling $50,000 to those who suffered smoke inhalation. There is no litigation related to this event as the customers are happy with the compensation they received. Because the incident occurred after year end, ETI has recorded nothing with respect to it in the 2019 financial statements.
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