Your inquiries disclose the following:

$1.$ The partnership was organized on January $1,2023.$ No provision was made in the partnership agreement for the allocation of partnership profits and losses. During $2023,$ profits were allocated equally among the partners. The partnership agreement was amended, effective January $1,2024,$ to provide for the following profit and loss ratio: Bonita, $40\%$; Windsor, $40\%$; and Sheridan, $20\%.$ The amended partnership agreement also stated that the accounting records were to be maintained on the accrual basis and that any adjustments necessary for $2023$ should be allocated according to the $2023$ profit allocation agreement.

$2.$ The following amounts were not recorded as prepayments or accruals.

December $31$

$2024$

$2023$

Prepaid insurance

$$700$

$$800$

Advances from customers

$900$

$1,600$

Accrued interest expense

$500$

The advances from customers were recorded as sales in the year the cash was received.