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: Date Transaction Cost Useful Life GPI January 15, Year 1 . . . . . . . . . Purchase Machine X $ 20,000 4 years 100 March 20, Year 1 . . . . . . . . . . Purchase Machine Y 55,000 5 years 110 October 10, Year 1 . . . . . . . . Purchase Machine Z 130,000 10 years 130 December 31, Year 1 . . . . . . . 140 April 15, Year 2 . . . . . . . . . . . Sold Machine X 160 December 31, Year 2 . . . . . . . 180 Balance Sheets 1/1/Y1 12/31/Y1 Cash and receivables . . . . . . . . . . . . . . . . . . . . . . $20,000 $35,000 Fixed assets, net . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 45,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70,000 $80,000 Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000 $15,000 Contributed capital . . . . . . . . . . . . . . . . . . . . . . . 55,000 55,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . — 10,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70,000 $80,000 Income Statement, Year 1 Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,000) Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (35,000) Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000 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 equired: a. Calculate Doner Company’s Year 1 purchasing power gain or loss on net monetary items. b. Determine Doner Company’s Year 1 income AND Balance Sheets on a general purchasing power basis (ignore income taxes).