Hello: Can someone explain the below? I am trying to understand the below. How does net income...

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Accounting

Hello: Can someone explain the below? I am trying to understandthe below.
How does net income and assets vary for each of the below?
1) furniture company sold an unused piece of land next door totheir manufacturing facilities. land was purchased for $2M yearsback and sold for $4M. buyer paid in cash.
2) goodwill was over valued by $25M. Company recorded the entryto adjust goodwill to current value
3) company repurchased $5M of common stock and is holding themas treasury stock
4) company split its common stock 2 for 1 (one share split to 2shares)
5) company employees exercised 2000 vested stock options withstrike price of $100 each
6) company wrote off $2M of accounts receivable.

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3.7 Ratings (301 Votes)

1 Sale of unused piece of land Sale proceeds 4000000 Increase in Cash Asset Less Purchase Value 2000000 Decrease in Land Asset Profit on sale of Land 2000000 Net Income 2 Goodwill is overvalued by 25 Million is an impairment loss The entry is Loss on Impairment of Goodwill ac Dr 25000000 To Goodwill ac 25000000 So Loss on impairment will be written down from Net See Answer

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