The following information applies to the questions displayed below.]

Melodys Piano School operations for the month of May were limited to the following transactions:

	Provided $400 of piano lessons to students who paid in cash.
	Provided $300 of piano lessons on account.
	Collected $225 from students who took piano lessons during April.
	Paid Aprils piano rental bill of $125.
	Received Mays piano rental bill of $175 and set it aside for payment in June.

1. What is Melody's Net Income for May using the cash basis of accounting?

a) $525

b) $230

c)$500

d) $650

2. What is Melody's Net Income for May using the accrual basis of accounting?

a) $525

b) $230

c) $650

d) $500

A company had the following assets and liabilities at the beginning and end of the current year:

Assets

Liabilities

Beginning of year

$

221,000

$

91,500

End of the year

252,000

76,400

3. Common stock in the amount of $ 18,500 was issued and dividends of $ 5,700 were paid during the year. What is the amount of net income for the year?

a) $46,100

b) $33,300

c) $58,900

d) $21,900

During 2015, Maverick Law Firm had the following transactions with it clients (customers):

On February 1, 2015, the company received cash of $6,800 from clients in payment of their account balances as of December 31, 2014.

On November 1, 2015, the company received $3,800 cash as payments in advance for law services to be performed in 2016.

The company received a total of $22,000 in cash for law services that were performed during 2015.

The company sent bills totaling $5,800 to clients for services performed during 2015; this amount was unpaid as December 31, 2015.

4. What is the amount of Law Services Revenue that will be reported on the income statement for the year 2015?

a) $34,600

b) $38,400

c) $31,600

d) $27,800

The following account balances are taken from the December 31, 2015, financial statements of ABZ Advertising Company. The company uses accrual basis accounting.

Advertising revenue	$ 55,332
Cash	49,245
Accounts receivable	8,149
Interest expense	2,470
Accounts payable	5,370
Operating expenses	44,819
Unearned revenue	1,400
Equipment	21,579
Income tax expense	2,767

The following activities occurred in 2016:

1.	Performed advertising services on account, $65,450.
2.	Received cash payments on account, $12,600.
3.	Received deposits from customers for advertising services to be performed in 2017, $4,000.
4.	Made payments to suppliers on account, $5,370.
5.	Incurred $53,550 of operating expenses; $46,400 was paid in cash and $7,150 was on account and unpaid as of the end of the year. 5. What is the balance in the Cash account at December 31, 2016? a) $49,245 b) $14,075 c) $56,475 d) $54,457 6. What is the balance of Accounts Receivable at December 31, 2016? a) $64,999 b) $65,450 c) $52,850 d) $60,999 7. What is the amount of revenue that will be reported on the income statement for the year ended December 31, 2016? a) $60,080. b) $65,450. c) $46,400. d) $69,450.