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Prepare the report for your partner regarding the financial implications from your review of the 2 files. Prepare any journal entries in the appendix if

Prepare the report for your partner regarding the financial implications from your review of the 2 files. Prepare any journal entries in the appendix if necessary and also include any applicable note disclosures as part of your recommendation. For Marathon Ltd., prepare a revised income statement that reflects your recommendation for any applicable adjustments.

At the date of incorporation, the company had issued 2,000,000 common shares for $10 per share. On February 1, 2021, 20,000 of the shares were repurchased and cancelled by the company. The controller included the $1 million cost of this repurchase in operating expenses. The company had issued a call option in 2020, expiring in 2022 and allowing the holder to purchase 40,000 shares for $40 per share. The average share price in 2020 was $51.

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