Part A: (8 Marks)

The 31 December 2018 financial statements of Grape Ltd have been prepared in draft form. However, the accounts have not yet been printed and sent to shareholders. Subsequent to reporting date, the following events occur:

1. On 20 January 2019, the directors recommend a final dividend of $2 per share.
2. The company received an invoice from a supplier for $85,000 on 25 January 2019 for goods delivered in December 2018. The goods were included in closing inventory at an estimated cost of $100,000.
3. On 31 January 2019, the Remuneration Committee determined the CEOs bonus for the year ended 31 December 2018 as $3,000,000; the manager is entitled to an annual bonus based on company profits as determined by Remuneration Committee. No accrual has been made.
4. On 5 February 2019, the company executed a guarantee in favour of the banks for an outstanding loan of $1,000,000 that the bank made to Season Ltd, the companys major supplier, in December 2018. The guarantee was executed because the bank was demanding payment, which would have disrupted inventory supplies.

Required:

Assume all amounts are material for accounts purposes. For each of the above events state whether adjustment or disclosure is required in the 31 December 2018 financial statements. If adjustment is required, state the nature of the adjustment, that is the effect on elements of the financial statements. [8 marks]