For Howard and Joyce,the Changes in Net Worth for the Year

question 17

Essay

For Howard and Joyce,the changes in net worth for the year ended December 31,2012,are detailed as follows. $\begin{array}{llcc} \text { Realized increases in net worth: } & \\ \text { Salary } &\$50,000\\ \text { Interest income} &500\\ \text { Dividend income } &400\\\\ \text {Realized decreases in net worth: } &\\ \text { Income taxes } &12,000\\ \text { Interest expenses } & 4,000 \\ \text { Personal expenditures } &25,000\\\\ \text {Unrealized increases in net worth: } &\\ \text { Marketable securities } &5,000\\ \text {Residence } &2,000\\\\ \text { Unrealized decreases in net worth: } &\\ \text { Furnishings} & 4,000 \\ \text { Boat} &2,000\\ \text { Estimated income taxes on the differences between the estimated } &\\ \text { current values of assets and the estimated current amounts of} &\\ \text { liabilities and their tax bases } &7,000\\ \text {Net worth at the beginning of year } &60,000\\\end{array}$

Required:
Prepare a statement of changes in net worth for the year ended December 31,2010.

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Definitions:

NCI Adjustment

An adjustment in consolidated financial statements to reflect the share of equity interest that is not owned by the parent company's shareholders.

Retained Earnings

Retained earnings are the portion of a company's profits that are kept or retained by the company for reinvestment in its operations, rather than being distributed to its shareholders as dividends.

Tax Rate

The percentage at which an individual or corporation is taxed.

Depreciable Non-Current Asset

A long-term asset subject to depreciation, which systematically reduces its book value over its useful life to account for wear and tear.