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 Issuance of a significant number of shares of common stock.
7 Loss of a significant customer.
8 Prolonged employee strike.
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.
12 Merger with another company of comparable size.