The following information applies to the questions displayed below. Melody\'s Pi

Question

The following information applies to the questions displayed below. Melody's Piano School operations for the month of May were limited to the following transactions: Provided $500 of piano lessons to students who paid in cash. Provided $380 of piano lessons on account. Collected $285 from students who took piano lessons during April. Paid April's piano rental bill of $175 . Received May's piano rental bill of $225 and set it aside for payment in June. value: 2.00 points What is Melody's Net Income for May using the cash basis of accounting? $610 O $840 O $655 O $285

Explanation / Answer

Solution - Calculation of net Income using Cash basis of accounting (Revenue and Expenses will be recognised only when transactions are transactrd in cash.

For Month of May

particulars Amount Cash Revenue $500 Cash received for April Lessons $285 Less : Paid Rental bill of April $175 Net Income using cash basis of accounting $610

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