Question 14.4 Events occurring after the end of the reporting period LO 9 OD In relation to the operations of Cat Ltd, the following events took place after the 30 June 2016 reporting period end. On 17 July 2016 Cat Ltd's main fishing fleet was sunk during a freak storm. Insurance will cover the replacement of the vessels but lost sales representing $550 000 in profits are not covered. On 19 July 2016 Cat Ltd took delivery of a fishing net for its prawn trawler. The net was pur- chased from a UK manufacturer on delivered duty paid shipping terms and was in transit at the end of the reporting period. An inspection of the net revealed significant structural flaws and the net was returned to the supplier on 28 July 2016. Cat Ltd is to receive a full refund of the $650 000 purchase price which had been paid in advance on 29 June 2016. On 29 August 2016 a lawsuit was lodged against the company by the families of crew members drowned in the 17 July storm, alleging negligence, and claiming $4 million in damages. No date has as yet been set for the court hearing. On 1 September 2016 the directors resolved to issue to the public 10000 5% debentures of $10 each, payable $5 on application and $5 on allotment. Required Classify the above events into adjusting and non-adjusting events after the end of the reporting period, justifying your choice