Question

William Jason achieved one of his life-long dreams by opening his own business, The Blossom Shack Driving Range, on May 1, 2020. He invested $20,100 of his own savings in the business. He paid $7,150 cash to have a small building constructed to house the operations and spent $810 on golf clubs, golf balls, and yardage signs. Jason leased 4 acres of land at a cost of $1,075 per month. (He paid the first month’s rent in cash.) During the first month, advertising costs totaled $780, of which $190 was unpaid at the end of the month. Jason paid his three nephews $400 for retrieving golf balls. He deposited in the company’s bank account all revenues from customers ($4,800). On May 15, Jason withdrew $810 in cash for personal use. On May 31, the company received a utility bill for $115 but did not immediately pay it. On May 31, the balance in the company bank account was $14,065.

Jason is feeling pretty good about results for the first month, but his estimate of profitability ranges from a loss of $6,035 to a profit of $1,620.