Question 12 (6 points) Listen It is January 30, 2022 and you CPA, are reviewing the results of the subsequent event audit procedures of BDP, a chain of dog grooming stores with a December 31, 2021 year-end Bobby Bullen is the sole shareholder of BDP You are writing a memo to your audit partner based on the results of your subsequent audit procedures and will be attending a meeting tomorrow with the partner and Bobby Bullen to discuss his findings. The audit report has not yet been signed You wonder whether the financial statements of BDP should be amended or if disclosure should be included for the following material subsequent events Event #1 Bobby Bullen has been exploring the possibility of expansion and has decided to purchase a 75% stake in another company, Doug's Doggle Delights (DDD) In order to finance the purchase, a share issue is planned for March 31, 2022. The negotiations between BDP and DDD are in the final stages but no contract has been signed to date Event #2 A discussion with the AR Clerk has revealed that a large customer with a significant receivable balance that was considered collectible at year end has unexpectedly declared bankruptcy on January 8, 2022 Event #3: A $2.5 million statement of claim was filed in court on January 10, 2022 claiming damages for the 2021 death of three dogs. The deaths were allegedly caused when a groomer left the back door of one of the stores open. All three dogs escaped and were never found, despite a large search effort organized personally by Bobby Bullen Although Bobby is heartbroken that this happened, he has denied responsibility on behalf of the employee and BDP. Bobby is claiming that it was an unavoidable accident and if the dogs had been better trained they would not have run away Bob's lawyers believe that he will be unsuccessful in his defense Required: For each item above, answer the following questions: a) What type of subsequent event is it? b) What is the appropriate treatment in the financial statements ? 100 Format V BI U Event Type of Subsequent Event Appropriate Treatment Event #1 - Expansion Event #2 Bankrupt client Event #3 Law suit >