Morlan Corporation is preparing its December 31, 2020, financial statements. Two events that occurred between December 31,

Question:

Morlan Corporation is preparing its December 31, 2020, financial statements. Two events that occurred between December 31, 2020, and March 10, 2021, when the statements were authorized for issue, are described below.

1. A liability, estimated at $160,000 at December 31, 2020, was settled on February 26, 2021, at $170,000.

2. A flood loss of $80,000 occurred on March 1, 2021.

Instructions

What effect do these subsequent events have on 2020 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...

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