Mostert music company had the following transactions inMarch: A. Sold instrument

Question

Mostert music company had the following transactions inMarch: A. Sold instruments to customers for$10,000, recieved $6,000in cash and the rest on account. The cost of the instrument was $7,000. B. Purchased $4,000 of new instruments inventory, paid $1,000in cash and owed the rest on account. C. Paid $600 wages for the month D. Recieved a $ 2,000 bill for utilities that will be paid inApril. E. Rcieved $1,000 from customers as deposits on orders of newinstruments to be sold to the customers in April. Complete the following: Cash basis Incomesstatement                              Accrualbasis income statement Revenues:                                                            Revenues: CashSales         $                                                Salesto customers   $ Customerdeposits                                                Expenses: Expenses:                                                            Costsof sales Inventorypurchases                                             Wagesexpense: Wagespaid   ___________                                 Utiliitesexpense:   ___________ CashIncome   $_________                                 NetIncome:         $___________ Mostert music company had the following transactions inMarch: A. Sold instruments to customers for$10,000, recieved $6,000in cash and the rest on account. The cost of the instrument was $7,000. B. Purchased $4,000 of new instruments inventory, paid $1,000in cash and owed the rest on account. C. Paid $600 wages for the month D. Recieved a $ 2,000 bill for utilities that will be paid inApril. E. Rcieved $1,000 from customers as deposits on orders of newinstruments to be sold to the customers in April. Complete the following: Cash basis Incomesstatement                              Accrualbasis income statement Revenues:                                                            Revenues: CashSales         $                                                Salesto customers   $ Customerdeposits                                                Expenses: Expenses:                                                            Costsof sales Inventorypurchases                                             Wagesexpense: Wagespaid   ___________                                 Utiliitesexpense:   ___________ CashIncome   $_________                                 NetIncome:         $___________

Explanation / Answer

CASH BASIS INCOMESTATEMENT Revenue Cash sales $6,000 Customer deposit $1,000 Expenses Inventory purchased ($1,000) Wages paid ($600) Cash Income $5,400 ACCRUAL BASIS INCOMESTATEMENT Revenue Sales to custmer $10,000 Expenses Cost of sales ($7,000) Wages expense ($600) Utilities expesne ($2000) Net Income $400

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