Reference no: EM133353544

Assignment:

EEE's fiscal year is coming to a close. The board of directors is meeting tomorrow and would like to review a draft statement of comprehensive income and a draft statement of financial position. You are the new director of financial management, and you assign this responsibility to Mr. Fused. Mr. Fused compiles the following information:

From the audited statement from last year: EEE started the year with assets of $240,000 (comprising cash, accounts receivable, equipment and furniture, and a truck), and liabilities of $4,600 (comprising accounts payable).

From financial records for this year:

Salaries $109,000

Donations $ 20,000

Education Program Expenses $ 27,000

Government Grants $225,000

Utility Expenses $ 7,000

Child Care Program Expense $ 51,000

Fundraising Expenses $ 4,000

Mr. Fused has drafted statements that show that the net income for the year was $47,000. His further analysis is that when the sum of all transactions ($443,000) is added to the beginning equity in EEE, the final statement of financial position will show a balance of $678,400 as the new Equity position.

Ms. Fuddled is concerned that something is missing: The equipment and furniture, and the truck, are now older. She points to a line in last year's books where the equipment and furniture was reduced in value by $5,000, and the truck was reduced in value by $7,000.

Questions: What is the value of "Equity" in EEE at the beginning of the fiscal period? Assuming Ms. Fuddled is correct, and that the same procedure should be followed this year, what amounts need to be recorded in this year's Net Income? What is the correct value for Net Income? What is the correct equity position for EEE at the end of the year?