Problem
Tamarisk, Inc. had the following transactions in May, its first month of business:
1. Collected $395 cash from customers for services provided in May.
2. Billed customers $695 for services provided in May.
3. Received $195 from customers for services to be provided in June.
4. Purchased $295 of supplies on account. All of the supplies were used in May but were paid for in June.
(a) Calculate profit for May using cash basis accounting.
(b) Calculate profit for May using accrual basis accounting.