William Murray achieved one of his life$-$long dreams by opening his own business, The Caddie Shack Driving Range, on May $1,2015.$ He invested $$20,000$ of his own savings in the business. He paid $$6,000$ cash to have a small building constructed to house the operations and spent $$800$ on golf clubs, golf balls, and yardage signs. Murray leased $4$ acres of land at a cost of $$1,000$ per month. $($He paid the first month$$s rent in cash.$)$

During the first month, advertising costs totalled $$750,$ of which $$150$ was unpaid at the end of the month. Murray paid his three nephews $$400$ for retrieving golf balls. He deposited in the company$$s bank account all revenues from customers $($$$4,700).$ On May

$15,$ Murray withdrew $$800$ in cash for personal use. On May $31,$ the company received a utility bill for $$100$ but did not immediately pay it$.$ On May $31,$ the balance in the company bank account was $$15,100.$

Murray is feeling pretty good about results for the first month, but his estimate of profitability ranges from a loss of $$4,900$ to a profit of $$2,450.$

$1.$ Accounting

Prepare a statement of financial position at May $31,2015.($Murray appropriately records any depreciation expense on a quarterly basis.$)$ How could Murray have determined that the business operated at a profit of $$2,450?$ How could Murray conclude that the business operated at a loss of $$4,900?$

$2.$ Analysis

Assume Murray has asked you to become a partner in his business. Under the partnership agreement, after paying him $$10,000,$ you would share equally in all future profits. Which of the two income measures above would be more useful in deciding whether to become a partner? Explain.

$3.$ Principles

What is income according to IFRS? What concepts do the differences in the two income measures for The Caddie Shack Driving Range illustrate?