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West Wing Distribution Corporation has a fiscal year end of December 31. On March 15, 2017,...

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Accounting

West Wing Distribution Corporation has a fiscal year end ofDecember 31. On March 15, 2017, the company’s 2016 financialstatements were issued. Between December 31, 2016 and March 15,2017, the following occurred:

1. On January 22, 2017, the company negotiated a major mergerwith Blakedon Industries to be completed by the middle of 2017.

2. On February 3, 2017, West Wing negotiated a $10 millionlong-term note (material amount) with the Credit Bank ofPennsylvania.

3. A flood destroyed one of the company’s manufacturing plantscausing $600,000 of uninsured damage on February 25, 2017.

Determine the appropriate treatment of each of these events inthe 2016 financial statements of West Wing DistributionCorporation.

Answer & Explanation Solved by verified expert
4.2 Ratings (540 Votes)
The accounting for subsequent events under US GAAP and IFRS is substantially similar For example under both US GAAP and IFRS if an event occurs that is indicative of conditions that arose after the end of the    See Answer
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Transcribed Image Text

West Wing Distribution Corporation has a fiscal year end ofDecember 31. On March 15, 2017, the company’s 2016 financialstatements were issued. Between December 31, 2016 and March 15,2017, the following occurred:1. On January 22, 2017, the company negotiated a major mergerwith Blakedon Industries to be completed by the middle of 2017.2. On February 3, 2017, West Wing negotiated a $10 millionlong-term note (material amount) with the Credit Bank ofPennsylvania.3. A flood destroyed one of the company’s manufacturing plantscausing $600,000 of uninsured damage on February 25, 2017.Determine the appropriate treatment of each of these events inthe 2016 financial statements of West Wing DistributionCorporation.

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