Reference no: EM132618178

Question - Wordsworth Ltd's financial year ended on 30 June 2020. The following events occurred between the end of the reporting period and the date the directors of Wordsworth Ltd expect to authorise the financial statements for issue:

i. On 8 July 2020, the financial cost of inventory shipped from overseas is determined. The inventory was received in June 2020 and the cost was estimated for accounting purposes. The revised cost is $57 000 greater than the prior estimate.

ii. A customer of Wordsworth Ltd, is declared insolvent on 2 September 2020 as the customer's uninsured premises were destroyed by a bushfire. The customer owed Wordsworth Ltd $300 000 as at 30 June.

iii. An increase in tax rates from 30 per cent to 37 per cent for the year commencing 1 July 2020 was announced on 17 July. The deferred tax liability account is $660 000.

REQUIRED - For each of the above material after-reporting-period events, state the reason why an adjustment or disclosure may or may not be required in the 30 June 2020 financial statements. Assume the above events would not significantly affect the going-cocern assumption for Wordsworth Ltd. You are not required to draft any financial statement notes or provide any journal entries for adjustments.