Question 1

The following events took place between the 31 December 2017 reporting date and the date the

financial statements were authorised for issue.

The company makes an issue of 100,000 shares which raises $200,000 shortly after the Statement

of Financial Position date.

A legal action had been brought against the company for breach of contract prior to the year end.

The outcome was decided shortly after the Statement of Financial Position date, and as a result the

company will have to pay costs and damages totalling $80,000. No provision has currently been

made for this event.

Inventory included in the accounts at the year end at cost $25,000 was subsequently sold for

$15,000.

A building in use at the Statement of Financial Position date and valued at $500,000 was

completely destroyed by fire. Unfortunately, only half of the value was covered by insurance

Which of the above events are adjusting events in the financial statements?