During audit completion, you have noted the following subsequent events for ABC Manufacturing (auditee). The year end for the company is June 30 and the audit report is due to be signed on August 20. For each item noted, explain what type of subsequent event it is (please incorporate details from the scenario) and identify the appropriate treatment in the financial statements. . . The board is planning to issue shares in a private placement on August 15. The share issue is to fund the purchase of a 60-percent stake in another company. The negotiations are in the final stages and although the contract is not yet signed, it will be signed by August 15. A statement of claim was lodged in court in the week after year end claiming damages for illness allegedly caused by chemicals used at a subsidiary company's manufacturing plant in the 1990s. This is the tenth such claim lodged and the client has denied responsibility in all cases because it was unreasonable to believe at that time that these chemicals had adverse health effects. The claimant has new scientific evidence that counters this defence. The review of subsequent cash receipts has revealed that several of the accounts receivable that were considered doubtful have now been paid. However, the audit procedures have shown that a large customer with a significant receivable balance considered safe on June 30 unexpectedly declared bankruptcy on July 20.