Hallergan Company produces car and truck batteries that it sells primarily to auto manufacturers. Dorothy Hawkins, the company’s controller, is preparing the financial statements for the year ended December 31, 2021.Hawkins asks for your advice concerning the following information that has not yet been included in the statements. The statements will be issued on February 28, 2022.1. Hallergan leases its facilities from the brother of the chief executive officer.2. On January 8, 2022, Hallergan entered into an agreement to sell a tract of land that it had been holding as an investment. The sale, which resulted in a material gain, was completed on February 2, 2022.3. Hallergan uses the straight-line method to determine depreciation on all of the company’s depreciable assets.4. On February 8, 2022, Hallergan completed negotiations with its bank for a $10,000,000 line of credit.5. Hallergan uses the first-in, first-out (FIFO) method to value inventory.Required:For each of the above items, discuss any additional disclosures that Hawkins should include in Hallergan’s financial statements.

Question

Hallergan Company produces car and truck batteries that it sells primarily to auto manufacturers. Dorothy Hawkins, the company’s controller, is preparing the financial statements for the year ended December 31, 2021.
Hawkins asks for your advice concerning the following information that has not yet been included in the statements. The statements will be issued on February 28, 2022.
1. Hallergan leases its facilities from the brother of the chief executive officer.
2. On January 8, 2022, Hallergan entered into an agreement to sell a tract of land that it had been holding as an investment. The sale, which resulted in a material gain, was completed on February 2, 2022.
3. Hallergan uses the straight-line method to determine depreciation on all of the company’s depreciable assets.
4. On February 8, 2022, Hallergan completed negotiations with its bank for a $10,000,000 line of credit.
5. Hallergan uses the first-in, first-out (FIFO) method to value inventory.
Required:
For each of the above items, discuss any additional disclosures that Hawkins should include in Hallergan’s financial statements.

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