2. Their assets:
(1) Tools and accessories (inventory): $2,500
(2) Bicycles (fixed assets): $400
(3) Bank deposits (money funds): $7,000
(4) Their living expenses (other receivables): $1,000
Assets Total: $10,900
(Note: The individual's living expenses cannot be treated as an expense of the maintenance department, the "accounting entity," but rather as a loan to them)
Their liabilities:
(1) Unpaid advertising costs: $250
(2) Unpaid utility bills: $100
Total: $350
3. Revenue: 7000+1000+2500+400+(750-250)+300+1000-10000=$2700
(Assuming that all revenues are received in cash)
Expenses: 1000+750+300+100= 2150$
Their gross profit is: 2700-2150=550$
By the accounting equation:
Assets = Liabilities + Owner's Equity
At the end of March: 10900=350+Owner's Equity
Owner's Equity = $10,550
Increase in Owner's Equity: 10550 - 10000 = $550
That is, gross profit increased by $550, the same result as above.