On 1 January 20X1, Tyler Trading Company was incorporated by Jim Tyler, who owned all the common shares. His original investment was $100,000. Transactions over the subsequent three years were as follows: 20 MARKS

2 January 20X1 Purchased 10 cars for resale at $10,000 each. 30 June 20X1 Sold six cars for total proceeds of $90,000.

31 December 20X1 Remaining four cars have an estimated sales value of $48,000.

15 July 20X2 Bought three cars for resale at

$20,000 each.

3 October 20X2 Sold four cars from 20X1 purchase for total proceeds of $50,000.

31 December 20X2 Cars from 20X2 purchase have an estimated sales value of $84,000.

30 November 20X3 Sold all three cars bought in 20X2 for total proceeds of $106,000.

Required: 1. Calculate accounting income, based on transactions, for 20X1, 20X2, and 20X3. 2. Calculate economic income, based on events or changes in value, for 20X1, 20X2, and 20X3. 3. Compare total accounting income with total economic income and explain your findings. 4. In what ways is accounting income superior to economic income? In what ways is economic income superior? Use the accounting principles from Chapter 2 to explain.