(Subsequent Events) For each of the following subsequent 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 a 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 fi re.
4. Sale of a significant portion of the company’s assets.
5. Retirement of the company president.
6. Issuance of a significant number of ordinary shares.
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.