Melody's Piano School operations for the month of May were limited to the following transactions: Provided $800 of piano lessons to students who paid in cash.
Provided $200 of piano lessons on account.
Collected $600 from students who took piano lessons during April.
Paid April's piano rental bill of $200.
Received May's piano rental bill of $300 and set it aside for payment in June.
Assuming that the company uses cash basis accounting,what is net income for May?

Question

Quizplus · Accepted Answer

Cash basis accounting net income = Cash receipts − Cash payments
= ($800 + $600)− $200 = $1,200

Melody's Piano School Operations for the Month of May Were