Required: Read all the questions carefully. Figure out which are adjusting and non-adjusting events. Justify and explain your answers in accordance with IAS-10. Note: Question No 1-7 are related to Friends Limited Inc. case. 1. Friends Limited's financial yar ends on 31 December. On 20 December 2013, Friends Limited was involved in a court case with a customer who sued the company for delivering products where there was a dispute over the exact ingredients included in the products manufactured by Friends Limited. These products were delivered to the customer in October 2013. The details of the case were heard by 22 December but the judge decided to reserve her judgment until 8 January 2014. On 8 January 2014, the judge ruled in favour of the customer, awarding it damages of 100,000. 2. Friends Limited has an investment worth 1,000,000 in its financial statements at 31 December 2013. Due to the continuing recession, the investment reduced in value to 900,000 by 15 January 2014. 3. On 8 January 2014, one of the accountants left Friends Limited suddenly. On further investigation, the company realised that this employee had been paying himself money from the bank account in relation to false rental invoices. The amount of the overpayment was found to be 86,000. With the help of the police, the accountant was tracked down and repaid all of the money on 18 January 2014 4. On 10 January 2014, Friends Limited sold some inventory for 80,000. This inventory had been included in the year-end inventory count at cost of 100,000. 5. Friends Limited sold a truck on 31 December 2013 for 20,000. This truck had been purchased on 1 January 2008. On 31 December a non-refundable deposit of 15.000 was paid towards a new truck and a cheque was posted with the balancing payment of 50,000. This cheque was not received and cashed by the seller until 4 January 2014 6. A trade receivable which owed Friends Limited 5,000 at the year end was declared bankrupt on 5 January 2014. Friends Limited has no prospect of recovering any money from this bankrupt customer. 13 B0% 7. A dividend of 40,000, in relation to the financial year-ending 31 December 2013, was declared in January 2014 and paid on 12 January 2014. The accountant included the dividend in the financial statements for the year-ended 31 December 2013. 8. ABC PLC. has recently issued financial statements for the year ended 31 December 2014. Following timeline of events preceded the issuance of financial statements: I Page 1 of 3 Date 31 December 2014 10 January 2015 20 January 2015 Event Year End Preparation of financial statements Approval by the Audit Committee for presentation of financial statements to the Board of Directors for their approval. Public announcement of key financial results Approval by Board of Directors for the presentation of financial statements at the Annual General Meeting (AGM) for approval by the shareholders. Approval of financial statements by shareholders at the AGM Issuance of copies of annual report to shareholders. 25 January 2015 26 January 2015 28 January 2015 30 January 2015 Required: What is the last relevant date for the consideration of the Events after the Reporting Period of the issued financial statements? Required: Read all the questions carefully. Figure out which are adjusting and non-adjusting events. Justify and explain your answers in accordance with IAS-10. Note: Question No 1-7 are related to Friends Limited Inc. case. 1. Friends Limited's financial yar ends on 31 December. On 20 December 2013, Friends Limited was involved in a court case with a customer who sued the company for delivering products where there was a dispute over the exact ingredients included in the products manufactured by Friends Limited. These products were delivered to the customer in October 2013. The details of the case were heard by 22 December but the judge decided to reserve her judgment until 8 January 2014. On 8 January 2014, the judge ruled in favour of the customer, awarding it damages of 100,000. 2. Friends Limited has an investment worth 1,000,000 in its financial statements at 31 December 2013. Due to the continuing recession, the investment reduced in value to 900,000 by 15 January 2014. 3. On 8 January 2014, one of the accountants left Friends Limited suddenly. On further investigation, the company realised that this employee had been paying himself money from the bank account in relation to false rental invoices. The amount of the overpayment was found to be 86,000. With the help of the police, the accountant was tracked down and repaid all of the money on 18 January 2014 4. On 10 January 2014, Friends Limited sold some inventory for 80,000. This inventory had been included in the year-end inventory count at cost of 100,000. 5. Friends Limited sold a truck on 31 December 2013 for 20,000. This truck had been purchased on 1 January 2008. On 31 December a non-refundable deposit of 15.000 was paid towards a new truck and a cheque was posted with the balancing payment of 50,000. This cheque was not received and cashed by the seller until 4 January 2014 6. A trade receivable which owed Friends Limited 5,000 at the year end was declared bankrupt on 5 January 2014. Friends Limited has no prospect of recovering any money from this bankrupt customer. 13 B0% 7. A dividend of 40,000, in relation to the financial year-ending 31 December 2013, was declared in January 2014 and paid on 12 January 2014. The accountant included the dividend in the financial statements for the year-ended 31 December 2013. 8. ABC PLC. has recently issued financial statements for the year ended 31 December 2014. Following timeline of events preceded the issuance of financial statements: I Page 1 of 3 Date 31 December 2014 10 January 2015 20 January 2015 Event Year End Preparation of financial statements Approval by the Audit Committee for presentation of financial statements to the Board of Directors for their approval. Public announcement of key financial results Approval by Board of Directors for the presentation of financial statements at the Annual General Meeting (AGM) for approval by the shareholders. Approval of financial statements by shareholders at the AGM Issuance of copies of annual report to shareholders. 25 January 2015 26 January 2015 28 January 2015 30 January 2015 Required: What is the last relevant date for the consideration of the Events after the Reporting Period of the issued financial statements