Morlan Corporation is preparing its December 31, 2014, financial statements. Two events that occurred between December 31,

Question:

Morlan is preparing its December 31, 2014, financial statements. Two events that occurred between December 31, 2014, and March 10, 2015, when the statements were issued, are described below.
1. A liability, estimated at $160,000 at December 31, 2014, was settled on February 26, 2015, at $170,000.
2. A flood loss of $80,000 occurred on March 1, 2015.
What effect do these subsequent events have on 2014 net income?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...