Melody\'s Piano School operations for the month of May are summarized in the fol
ID: 2498762 • Letter: M
Question
Melody's Piano School operations for the month of May are summarized in the following three transactions: • Provided $650 of instruction to students. • Received $850 cash from students—of which $475 is for lessons provided in May, and $375 is for lessons provided in April. • Paid April's piano rental bill of $175. Received May's bill of $360 but did not pay.
What is Melody's Net Income for May using the cash basis of accounting?
What is Melody's Net Income for May using the cash basis of accounting?
Explanation / Answer
Accrual Basis:
Revenue = 650
Expenses =360
Net Income = $650- $360
Net Income = $290