Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2014, balance sheet, with appropriate disclosures.
January 18, 2018
Carlton Company is involved in four separate industries.
January 18, 2018

For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

Exercise 24-2

For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

Sr. No.
Subsequent (Post-Balance-Sheet) Events
1.Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
2.Introduction of a new product line.
3.Loss of assembly plant due to fire.
4.Sale of a significant portion of the company’s assets.
5.Retirement of the company president.
6.Prolonged employee strike.
7.Loss of a significant customer.
8.Issuance of a significant number of shares of common stock.
9.Material loss on a year-end receivable because of a customer’s bankruptcy.
10.Hiring of a new president.
11.Settlement of prior year’s litigation against the company (no loss was accrued).
12.Merger with another company of comparable size.
 

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