Question: Linden Corporation is preparing its December 31, 2010, financial statements. Two events that occurred between December 31, 2010, and March 10, 2011, when the statements were issued, are described below.
A liability, estimated at $160,000 at December 31, 2010, was settled on February 26, 2011, at $170,000.
A flood loss of $80,000 occurred on March 1, 2011.
What effect do these subsequent events have on 2010 net income? (If there is no impact select not change and 0 for the amount.)
Net income will increase/decrease/not change by $------- as a result of the adjustment of the liability.
Net income will increase/decrease/not change by $------------ as a result of the adjustment of the flood loss.