Question

Leonard and Michelle have asked you to prepare their statement of changes in net worth for the year ended August 31, 20X3. They have prepared the following comparative statement of financial condition based on estimated current values as required by ASC 274:


Additional Information
1. Leonard and Michelle's total salaries during the fiscal year ended August 31, 20X3, were $44,300; farm income was $6,700; personal expenditures were $43,500; and interest and dividends received were $1,400.
2. They purchased marketable securities in 20X1 at a cost of $11,000 and with a market value of $11,000 on August 31, 20X2, and sold them on March 1, 20X3, for $10,700. Leonard and Michelle neither purchased nor sold additional marketable securities during the fiscal year.
3. The values of the residence and farmland are based on year-end appraisals.
4. On August 31, 20X3, Leonard purchased a used combine at a cost of $14,000. He made a $4,000 down payment and signed a five-year, 10 percent note payable for the $10,000 balance owed. He did not purchase or sell other farm equipment during the fiscal year.
5. The cash surrender value of the life insurance policy increased during the fiscal year by $1,600. However, Leonard had borrowed $4,000 against the policy on September 1, 20X2. Interest at 15 percent for this loan's first year was paid when due on August 31, 20X3.
6. Leonard and Michelle paid federal income taxes of $12,400 during the 20X3 fiscal year.
7. Mortgage payments made during the year totaled $9,000, which included payments of principal and interest.

Required
Using the comparative statement of financial condition and additional information provided, prepare the statement of changes in net worth for the year ended August 31, 20X3.


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  • CreatedMay 23, 2014
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