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Describe how events should be accounted

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Reference no: EM132858933

Horizon Ltd is in the process of preparing its financial statements for the year ended 30 June 2022. Prior to the financial statements being issued the following events took place:

  • On 2 July 2022, the firm's head office was hit and destroyed by an asteroid killing the firm's CEO. The office is not insured and the likely replacement cost is $30 million. The meteor had not been predicted by astronomers to collide with Earth on that date;
  • The accountant realised that invoices totaling $40,000 for repairs had been paid but not recorded for the year ending 30 June 2020.
  • On 1 August 2022 the court awarded $400,000 damages to an employee that sued the firm for injuries sustained at work in 2019. No amount had been recorded previously.

Required

Question 1: Describe how these events should be accounted for in the 2022 financial statements. If needed prepare required journal entries.

Reference no: EM132858933

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