It is February 2015 and Janix Corporation is preparing to

#1887
It is February 2015 and Janix Corporation is preparing to issue financial statements for the year
ended December 31, 2014. To prepare financial statements and related disclosures that are
faithfully representative, Janix is reviewing the following events in 2014:1. In August 2014,
Maddux Incorporated filed a lawsuit against Janix for alleged patent infringement, claiming $1.3
million in damages. In the opinion of Janix's management and legal counsel, it is not likely that
damages will be awarded to Maddux.2. In January 2015, there was a significant decline in the
fair value of Janix's FV-NI (fair value-net income) investments, resulting in an unrealized holding
loss of$720,000.3. In January 2015, a customer filed a lawsuit against Janix for alleged breach
of contract related to services provided in 2014. The customer is seeking damages of $950,000.
Janix’s; legal counsel believes that Janix will likely lose the lawsuit and have to pay between
$850,000 and $950,000.4. In August 2014, Janix signed a contract to purchase 200,000
inventory units in August 2015 for a price of $12 per unit. According to the supplier's price list at
December 31, 2014, the price per inventory unit had decreased to $10 per unit.5. At December
31, 2014, Janix has a $1.1-million demand loan outstanding. The terms of the demand loan
restrict Janix payment of dividends to $2 per share.6. On January 31, 2015, Janix issued
100,000 new common shares, raising $2 million in new capital. Janix prepares financial
statements in accordance with IFRS.InstructionsFor each item above, indicate whether the
event relates to a provision, contingency, commitment, or subsequent event, and explain the
appropriate accounting treatment. If no adjustment or disclosure is required, explain why.View
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It is February 2015 and Janix Corporation is preparing to

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