QUESTION 5 (10 Marks) In the audit of Serena Tools Ltd for the year ended 30 June 2019, Julian Chipotle (a senior auditor) lists the following items that he considers material for review by the engagement manager. 1. A $26 000 sale on 14 July 2019 for fabrication tools was included in inventory at a cost of $35 000. 2. Bonds were issued on 16 August 2019 in the amount of $5 000 000. 3. Equipment was purchases on 31 July 2019 for the amount of $125 000. 4. A major customer filed for bankruptcy on 15 June 2019. 5. A legal action in the amount of $150 000 was settles on 6 August 2019 and is listed as a contingent liability on the financial statements. 6. A legal action was filed against Serena Tools for an injury to a customer's employee using a tool sold to them by Serena Tools. REQUIRED (a) Which of the preceding six items are most likely to be considered subsequent events? (2 marks) (b) How could Julian have found each of the six items? (4 marks) (0) What is the appropriate treatment of each of these six items on 30 June 2019 financial statements, assuming each one is material? (4 marks)