Twо types оf subsequent events require cоnsiderаtion by mаnаgement and evaluation by the auditor. Type I (Recognized Events): Events that provide additional evidence about conditions that existed at the date of the balance sheet and that affect the amounts or estimates involved in the financial statement preparation process. Type I events require adjustment of the numbers in the financial statements. Type II (Unrecognized Events): Events that provide evidence about conditions that did not exist at the date of the balance sheet but that arose subsequent to that date. Type II events do not result in adjustment of the numbers in the financial statements but usually require disclosure in the notes to the financial statements. For each of the following situations (1. - 8.), indicate whether it is a Type I or Type II subsequent event.