Doner Company Inc. begins operations on January 1, Year 1.

Doner Company Inc. begins operations on January 1, Year 1. The company's unadjusted financial statements for the year ended December 31, Year 1, appear as follows:
Doner Company Inc. begins operations on January 1, Year 1.

Revenues and expenses occur evenly throughout the year; revenues and other expenses are realized in terms of monetary assets (cash and receivables).
General price indexes for Year 1 are as follows:
1/1/Y1 100
Average Y1 120
12/31/Y1  150

Required:
a. Calculate Doner Company's Year 1 purchasing power gain or loss on net monetary items.
b. Determine Doner Company's Year 1 income on a general purchasing power basis (ignore income taxes).

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...