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Which company experienced a number of material events

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Reference no: EM132940154

Problem 1: Just before the finalization of the financial statements for the year ended 30 June 2020, a company experienced a number of material events, including:

I. on 10 July 2020 the directors decided to close a division of the company at an estimated cost of $2,000,000.

II. on 10 August 2020 a court decision found the company liable to pay damages of $600,000 to a major customer who had commenced legal action in April 2018.

III. an independent valuation of property conducted on 20 July 2020 revealed that the directors' valuation included in the 30 June 2020 financial statements was overstated by $700,000.

In respect of the events listed above, it will be necessary to adjust the financial statements, by way of general journal entries, for:

A. I, II and III.

B. II only, and make a note disclosure for I and III.

C. III only, and make a note disclosure for I and II.

D. II and III only, and make a note disclosure for I.

Reference no: EM132940154

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