Cash basis income statement

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Reference no: EM139746

Mostert Music Company had the following transaction in March:

a. Sold instruments to customers for $10,000; received $6,000 in cash and the rest on account. The cost of instruments was $7,000.

b. Purchased $4,000 of new instrument inventory; paid $1,000 in cash and owed the rest on account.

c. Paid $600 in wages for the month

d. Received a $200 bill for utilities that will be paid in April

e. Received a $1,000 from customers as deposits on orders of new instruments to be sold to the customers in April. Complete the following statements:

Cash basis Income Statement		Accrual basis Income Statement
Revenues:		Revenues:
Cash Sales	$	Sales to customers	$
Customer Deposits		Expenses:
Expenses:		Cost of sales
Inventory Purchases		Wages expense
Wages paid		Utility expense
Cash Income	$	Net Income	$

Reference no: EM139746

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