Answer to Question #134594 in Accounting for Constah Nantinda

Question

1. The market value of a listed investment decreased in January 2019 to N$600 000. Investments
are stated at market value. Assume that the company does not speculate with shares.
2. A debtor with an outstanding balance of N$71 500 on 31 December 2018, was declared
insolvent and placed under liquidation on 20 January 2019. The liquidator indicated that creditors
will receive 30 cents in the rand. No allowance for credit losses was made at reporting date.
3. On 15 January 2019 the directors declared a dividend of 10 cents per share for the year ended
31 December 2018. There is 100 000 issued ordinary shares.
4. During January 2019 inventory with a value of R20 000 was destroyed when a store was burnt
down during a political uproar.
Required:
1. Discuss with reasons whether each of the above situations are adjusting/Non
adjusting events.

1. Show journal entries of the above where applicable

Answer 1

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