• Prepare a correct income statement for the quarter ended March 31, 2016. (Show details of your calculations!)
• Explain in detail to Alice the generally accepted accounting principles that she did not recognize in preparing her income statement and their effect on her results.

Week Three Supplemental Homework Name: The Holiday Travel Court was organized on April 1, 2014 by Alice Adare. Alice is a good manager but a poor accountant. From the trial balance prepared by a part time bookkeeper, Alice prepared the following income statement for the quarter that ended March 31, 2016: Holiday Travel Court Income Statement For the quarter ended March 31, 2016 Revenues: Travel Court rental fees Operating Expenses: Advertising $ 5,200 Wages 29,800 Utilities 900 Depreciation 800 Repairs 4,000 Total operating expenses Net Income $ 95,000 40,700 54,300 Alice knew that something was wrong with the statement because net income had never exceeded $20,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. You first look at the trial balance. In addition, to the account balances reported above in the income statement, the ledger contains the following additional selected balances at March 31, 2016: Supplies $ 5,200 Prepaid Insurance 7,200 Notes Payable 12,000 You then make inquires and discover the following: a. Travel court rental fees include advanced rentals for the summer month occupancy of $28,000. b. There was $1,300 of supplies on hand at March 31. c. Prepaid insurance resulted from the payment of a one year policy on January 1, 2016. d. The mail on April 1, 2016 brought the following bills: advertising for week of March 24 of $110, repairs made on March 10 for $260, and utilities of $180. e. There are four employees who receive total wages of $350 each day. At March 31, 2 days of wages have been incurred but not paid. f. The note payable is a 3 month, 10% note, dated February 1, 2016. Instructions: a. Prepare a correct income statement for the quarter ended March 31, 2016. (Show details of your calculations!) b. Explain in detail to Alice the generally accepted accounting principles that she did not recognize in preparing her income statement and their effect on her results