Q19 On June 1, Royal Corp. began operating a service company with an initial cash investment by shareholders of $3,206,000. The company provided $7,300,000 of services in June and received full payment in July. Royal also incurred expenses of $2,903,000 in June that were paid in August. During June, Royal paid its shareholders cash dividends of $501,000. What was the company's income before income taxes for the two months ended July 31 under the following methods of accounting?

	Cash Basis			Accrual Basis
a.	$	4,397,000		$	4,397,000
b.	$	7,603,000		$	3,896,000
c.	$	7,300,000		$	4,397,000
d.	$	7,300,000		$	3,896,000

Multiple Choice

• Option a

• Option b

• Option c

• Option d