(Post-Balance-Sheet Events) 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.
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.