Problem:
The changes in net worth for the year ended December 31, 2004, follow:
Realized increases in net worth:
Salary $60,000
Dividend income $2,500
Interest income $2,000
Gain on sale of marketable securities $500
Realized decreases in net worth:
Income taxes $20,000
Interest expense $6,000
Personal Expenditures $29,000
Unrealized increases in net worth:
Stock options $3,000
Land $7,000
Residence $5,000
Unrealized decreases in net worth:
Boat $3,000
Jewelry $1,000
Furnishings $4,000
Estimated income taxes on the diff
between the estimated current values
of assets and the estimated current
amounts of liabilities and their tax
bases $15,000
Net worht at the beginning of the year $150,000
Q1. Prepare a statement of changes in net worth for the year ended December 31, 2004
Q2. Comment on the statment of changes in net worth.