a) During the audit of Die Hard Company Limited the following items were listed on the file divider under subsequent events.
i) Kodjo Armah, a major debtor for GH¢400,000 has been found to be insolvent.
ii) Large quantities of stocks were destroyed by fire in the first month after the reporting date.
iii) Judgement in respect of litigation that was ongoing before the year end has been given against the company shortly after the end of the financial year. The judgement debt was GH¢ 5 million.
iv) Two customers had put in a claim in respect of goods sold to them under warranty before the year end of GH¢300,000 and GH¢450,000 respectively. No provision was made for warranty claims in the financial statements.
v) The company issued fresh equity shares after the year end. The number of shares was 2.5 million which generated GH¢5 million.
Required:
Classify the above items and indicate the treatment required in the financial statements. (10 marks)
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