### Complete cash basis versus accrual basis income

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##### Reference no: EM13256615

Reporting Cash Basis versus Accrual BasisIncome

Mostert Music Company had the following transactions inMarch:

a. Sold instruments to customers for \$10,000; received\$6,000 in cash and the rest on account. The cost of the instrumentswas \$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. Completethe following statements:

_________________________________________________________________________________

Cash Basis Income Statement                              Accrual Basis IncomeStatement

Revenues:                                                     Revenues:

Cash sales                        \$                               Sales to customers        \$

Customer deposits

Expenses:                                                      Expenses:

Inventory purchases                                    Cost of sales

Wages paid                                                            Wages expense

Utilities expense

_______                                                         ________

Cash income                           \$______                     Net income                 \$_______

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