The following accounting issues have arisen at Tri-City Computers Corp.:
1. An investor noted that the market price of shares seemed to decline after the date of record for a cash dividend. Why do you think that would be the case?
2. Corporations sometimes repurchase their own shares. When asked why, Tri-City Computers Corp.'s management responded that the shares were undervalued. What advantage would Tri-City Computers Corp. gain by repurchasing its own shares under these circumstances?
3. Tri-City Computers Corp. earned a significant profit in the year ended June 30, 2014, because land that it held was expropriated for a low-rental housing project. The company proposes to treat the sale of land to the government as operating revenue. Why do you think Tri-City Computers Corp. is proposing such treatment? Is this treatment appropriate?