Mostert Music Company had the following transaction inMarch: a. Sold instruments

Question

Mostert Music Company had the following transaction inMarch:

a. Sold instruments to customers for $10,000; received$6,000 in cash and the rest on account. The cost of theinstruments was $7,000. b. Purchased $4,000 of new instruments 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 paidin April. e. Received $1,000 from customers as deposits on ordersof new instruments to be sold to the customers in April. Complete the following statement: Cash Basis IncomeStatement                                    Accrual Basis Income Statement Revenues:                                                                   Revenues:      CashSales                ___________                        Sales to customers        _________      Customerdeposits     ___________ Expenses:                                                                   Expenses:      Inventorypurchases    __________                        Cost of sales         __________      Wagespaid                __________                        Wages expense      __________                                                                                      Utilities expense    __________ CashIncome                  ___________(dbl underline) Netincome         _________(dbl underline) Mostert Music Company had the following transaction inMarch:

a. Sold instruments to customers for $10,000; received$6,000 in cash and the rest on account. The cost of theinstruments was $7,000. b. Purchased $4,000 of new instruments 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 paidin April. e. Received $1,000 from customers as deposits on ordersof new instruments to be sold to the customers in April. Complete the following statement: Cash Basis IncomeStatement                                    Accrual Basis Income Statement Revenues:                                                                   Revenues:      CashSales                ___________                        Sales to customers        _________      Customerdeposits     ___________ Expenses:                                                                   Expenses:      Inventorypurchases    __________                        Cost of sales         __________      Wagespaid                __________                        Wages expense      __________                                                                                      Utilities expense    __________ CashIncome                  ___________(dbl underline) Netincome         _________(dbl underline) Mostert Music Company had the following transaction inMarch:

a. Sold instruments to customers for $10,000; received$6,000 in cash and the rest on account. The cost of theinstruments was $7,000. b. Purchased $4,000 of new instruments 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 paidin April. e. Received $1,000 from customers as deposits on ordersof new instruments to be sold to the customers in April. Complete the following statement: Cash Basis IncomeStatement                                    Accrual Basis Income Statement Revenues:                                                                   Revenues:      CashSales                ___________                        Sales to customers        _________      Customerdeposits     ___________ Expenses:                                                                   Expenses:      Inventorypurchases    __________                        Cost of sales         __________      Wagespaid                __________                        Wages expense      __________                                                                                      Utilities expense    __________ CashIncome                  ___________(dbl underline) Netincome         _________(dbl underline)

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 ($200) Net Income $2,200

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