Problem:
Carlisle clinic, a not-for-profit organization, reported an equity balance of $1 million on its December 2012 balance sheet. Assuming Carlisle clinic reported net income of $200,000 for the year that ended December 31, 2012 and had no other adjustments to equity during 2012, what was carlisle clinic equity balance as of December 31, 2011?
- $800,000
- $1.2 million
- $200,000
- $1 million
- Answer cannot be determined on the basis of the information provided
Note: Provide support for your rationale.