Each December the incoming members of the board of directors of the National Association of Accountants (NAA) met in joint session with the outgoing board as a means of smoothing the transition from one administration to another. At the meeting in December 2005, questions were raised about whether the board had adhered to the general policies of the association. The ensuing discussion became quite heated.

1. Did the association have an excess (revenues greater than expenses) or a deficit (expenses greater than revenues) in 2005?
2. Should the amount of surplus or deficit in 2005 affect the decision to change the annual dues for 2006?

Transcribed Image Text:

EXHIBIT 1 Estimated Income Statement Year Ending December 31, 2005 Revenues: Membership dues Journal subscriptions Publication sales Foundation grant 2000 annual meeting, profit $287,500 31,000 11,900 54,000 3,400 387,800 Total revenues Expenses: Printing and mailing publications Committee meeting expense Annual meeting advance Desktop publishing system Administrative salaries and expenses Miscellaneous 92,400 49,200 10,800 27,000 171,500 25,000 375,900 S 11,900 Total expenses Surplus