Nick Ramon, a local golf star, opened the Chip-Shot Driving Range on March 1, 2022, by investing $25,000 of his cash savings in the business. A caddy shack was constructed for cash at a cost of $8,000, and $800 was spent on golf balls and golf clubs. Nick leased five acres of land at a cost of $1,000 per month and paid the first month’s rent. During the first month, advertising costs totaled $750, of which $100 was unpaid at March 31, and $500 was paid to members of the high-school golf team for retrieving golf balls.
All revenues from customers were deposited in the company’s bank account. On March 15, Nick withdrew a total of $1,000 in cash for personal living expenses. A $120 utility bill was received on March 31 but was not paid. On March 31, the balance in the company’s bank account was $18,900.
Nick thought he had a pretty good first month of operations, but he estimates that either expenses exceeded revenues in the amount of $6,100, or revenues exceeded expenses in the amount of $2,480.

Instructions
Answer the following questions.
a. How could Nick have concluded that the business operated at a loss of $6,100? Was this a valid basis on which to determine net income?
b. How could Nick have concluded that the business operated at a net income of $2,480? (Hint: Compute assets, liabilities, and owner’s equity at March 31.) Was this a valid basis on which to determine net income?
c. Determine the actual net income for March.