BE 24-3

Morlan Corporation 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?