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:

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).

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Balance Sheets Cash andreceivables Fixed assets, n Total Payables Contributedcapital Retainedeamings Total Income Statement, Year 1 Revenues 1231YMM $35,000 45,000 $80,000 $15,000 55,000 10,000 $80,000 MYM $20,000 50,000 $70,000 $15,000 55,000 $70,000 $50,000 (5,000) (35,000) $10,000 Depreciation Other expenses Inco