Decision$-$Making Across the Organization

CT$4\mathrm{.}6$ Abbey Park was organized on April $1,2024,$ by Trudy Crawford. Trudy is a good manager but a poor accountant. From the trial balance prepared by a part$-$time bookkeeper, Trudy prepared the following income statement for the quarter that ended March $31,2025.$

Trudy knew that something was wrong with the statement because net income had never exceeded $\backslash (\backslash$$ $20,000\backslash )$ 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 in the income statement, the ledger contains these selected balances at March $31,2025.$

You then make inquiries and discover the following.

$1.$ Rent revenue includes advanced rentals for summer$-$month occupancy, $\backslash (\backslash$$ $21,000\backslash ).$

$2.$ There were $\backslash (\backslash$$ $600\backslash )$ of supplies on hand at March $31.$

$3.$ Prepaid insurance resulted from the payment of a $1-$year policy on January $1,2025.$

$4.$ The mail on April $1,2025,$ brought the following bills: advertising for week of March $24,\backslash (\backslash$$ $110\backslash )$; repairs made March $10,\backslash (\backslash$$ $1,040\backslash )$; and utilities $\backslash (\backslash$$ $240\backslash ).$

$5.$ Wage expense totals $\backslash (\backslash$$ $290\backslash )$ per day. At March $31,3$ days' wages have been incurred but not paid.

$6.$ The note payable is a $3-$month, $\backslash (7\backslash \%\backslash )$ note dated January $1,2025.$