The following events all occurred after the balance sheet date (6/30/15) but prior to the auditor's report (9/10/15). Which one would require an adjustment to the account balances as of 6/30/15?
A) client will market a new series of equity securities ($2 million of preferred stock) on 8/1/15
B) unused equipment on the books at 6/30/15 for $100 000 was disposed of 7/31/15 for $60 000
C) securities costing $30 000 held for temporary investment on 6/30/15 declined in value by one-third when the market took a plunge on 8/15/15
D) inventory valued at $100 000 on 6/30/15 was destroyed in a fire on 8/1/15

Question

Quizplus · Accepted Answer

The disposal of unused equipment for less than its book value indicates that the equipment was impaired as of the balance sheet date, requiring an adjustment to reflect the loss in value.

The Following Events All Occurred After the Balance Sheet Date