Question

Melody's Piano School operations for the month of May are summarized in the following three transactions: - Provided $1,150 of instruction to students. - Of the $1,150 of instruction provided in May, $900 is collected in cash, and an additional $675 is collected for lessons provided in April. - Paid April’s piano rental bill of $500. Received May’s bill of $550 but did not pay. What is Melody's Net Income for May using the cash basis of accounting?

Answer 1

Melody's net income for may is $ 1,075.

Step-by-step explanation:

New income in cash basis = collection from instruction - piano rental bill

= $ 1,575 - $ 500

= $ 1,075

Therefore, Melody's net income for may is $ 1,075.