Dunder Mifflin Company estimated and recorded a liability for a lawsuit for $10,000 in its financial statements dated December 31, Year 1. On January 15, Year 2, before the issuance of their financial statements, the actual amount the company had to pay was $25,000. What is the correct reporting for this subsequent event in Dunder Mifflin's December 31, Year 1 financial statements? The company can choose to report this event in whichever way they want The company must make adjustments to their year-end financial statements to reflect the change O Since this occurred after the Balance Sheet date, it does not impact the financial statements for December 31, Year 1 The company must only disclose the changes, but need not make any adjustments to the financial statements?

Dunder Matlin Company estimated and recorded a liability for a lawsuit for $10,000 in its financial statements dated December 31, Year 1. On January 15, Year 2, before the issuance of their financlal statements, the actual amount the company had to pay was $25,000. What is the correct reporting for this subsequent event in Dunder Miffin's December 31 , Year 1. The company can choose to report this event in whichaver way they want The company must make adjustinents to their yearend financial statements to retect the change Since this cocured afler the Balance Sheet date, it does not impact the financial statements for Decemter 31, Year 1 . The company must only disclose the changes, but need not make any adjustments to the financial statements