Reporting Cash Basis versus Accrual Basis Income
Forllowing transactions in March. Do both cash basis and accrual basis income
a) Sold instrument to customers for $10,000; received $6000 in cash and the rest on account. The cost of the instrument was $7000
b)Purchased $4000 of new instrument inventory;paid $1000 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 $1000 from customers as deposits on orders of new instruments to be sold to the customers in April
Cash basis I/S
Revenue
Cash sales
Customer deposit
Expense
Inventory purchase
Wages paid
Cash Income $
Accrual basis I/S
Sales to customers
Expense
Cost of sales
Wages expense
Utilities expense
Net Income $
