Ginger Co's financial year end is 30 June. Its financial statements were approved and issued on 15 August. The following occurred:

1- On 10 July, inventory was sold for less than its year end carrying amount due to flood damage. The flood occurred on 29 June.

2- On 31 July, a Court case was settled for a lower value than the amount provided for in the year end financial statements.

3- On 20 August, Ginger Co learned that a customer had brought a court case against it and was claiming damages relating to an issue that arose in May. Which of these material events should be adjusted for in the financial statements for the year ended 30 June?

1 and 2 only

1, 2 and 3

2 and 3 only

1 and 3 only