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Lucy and Nick thought they had a pretty good first month of operations. But, their estimates of profitability ranged from a loss of $4,900 to net income of $1,650. With the class divided into groups, answer the following. (a) How could the Lars have concluded that the business operated at a loss of $4,900? Was this a valid basis on which to determine net income? (h) How could the Lars have concluded that the business operated at a net income of $1,650? (Hint: Prepare a balance sheet at March 31.) Was this a valid basis on which to determine net income? (c) Without preparing an income statement, determine the actual net income for March. (d) What was the revenue earned in March?
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