Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Below is four subsequent events discovered by Sundara, the senior auditor while auditing the financial report of her client, Jamila Ltd for the year ending

image text in transcribed
image text in transcribed
Below is four subsequent events discovered by Sundara, the senior auditor while auditing the financial report of her client, Jamila Ltd for the year ending 30 June 2021. Sundara completed the audit report on 31 August 2021 and Jamila Ltd published the audited financial report on 30 September 2021. Required State the type of subsequent event and the appropriate treatment for each of the four subsequent events in the table below Place your answer in columns (2) and (3) of the table provided here below (1) (2) (3) Subsequent event Type of subsequent event Treatment 1. On 5 July 2021 customer returned products sold for $12,000 on 20 June 2021. This transaction was not recorded in the accounting books of Jamila Ltd. Sundara understands that the unrecorded sales return amount is a material error 2. Sundara spoke with Jamila solicitor and found that there is a pending case in the court which might lead to Jamila Ltd paying large compensation to its customer 3. While Sundara was reading the Sydney Morning Herald newspaper she realised that on 1 October 2021 Jamila Ltd had a fire that destroyed 80% of the warehouse. 4. Sundara found that depreciation for Machinery recorded for the financial year ended 30 June 2021 is understated by $10,000. Sundara investigation revealed that this is both Below is four subsequent events discovered by Sundara, the senior auditor while auditing the financial report of her client, Jamila Ltd for the year ending 30 June 2021. Sundara completed the audit report on 31 August 2021 and Jamila Ltd published the audited financial report on 30 September 2021. Required State the type of subsequent event and the appropriate treatment for each of the four subsequent events in the table below Place your answer in columns (2) and (3) of the table provided here below (1) (2) (3) Subsequent event Type of subsequent event Treatment 1. On 5 July 2021 customer returned products sold for $12,000 on 20 June 2021. This transaction was not recorded in the accounting books of Jamila Ltd. Sundara understands that the unrecorded sales return amount is a material error 2. Sundara spoke with Jamila solicitor and found that there is a pending case in the court which might lead to Jamila Ltd paying large compensation to its customer 3. While Sundara was reading the Sydney Morning Herald newspaper she realised that on 1 October 2021 Jamila Ltd had a fire that destroyed 80% of the warehouse. 4. Sundara found that depreciation for Machinery recorded for the financial year ended 30 June 2021 is understated by $10,000. Sundara investigation revealed that this is both unintentional and immaterial error

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions