Reference no: EM13788920
On April 1 Ivy Corp began operating a service company with an initial cash investment by shareholders of $1,000,000. The company provided $3,200,000 of services in April and received full payment in May. Ivy also incurred expenses of $1,500,000 in April that were paid in June. During May, Ivy paid its shareholders cash dividends of $500,000. What was the company's income before income taxes for the two months ended May 31 under the cash and the accrual basis of accounting?
Select one:
a. Cash Basis $3,200,000, Accrual Basis $1,700,000
b. Cash Basis $2,700,000, Accrual Basis $1,200,000
c. Cash Basis $3,200,000, Accrual Basis $1,200,000
d. Cash Basis $1,700,000, Accrual Basis $1,700,000
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