[pasanenl]

Reporting Cash Basis versus Accrual Basis Income
Mostert Music Company had the following transactions in March:
a. sold instruments to customers for $10,000; received $6,000 in cash and the rest on account.
The cost of the instruments 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 paid in April.
e. Received $1,000 from customers as deposits on orders of new instruments to be sold to the Customers in April.

Cash Basis Income Accrual Basis Income Stmnt.
Revenues: $3000 Revenues: $3000
Cash Sales: $6000 Sales to Customers: $ 6000
Cust. Dep.: $1000
Expenses: $4000 Expenses: $4000
Inventory Purchases: $1000 Cost of Sales:
Wages Paid: $600 Wages Expenses: $600
Utilities Expense: $200

Cash Income: $4400 Net Income: $4200

[pasanenl]

Cash Basis Income Accrual Basis Income Stmnt.
Revenues: $3000 Revenues: $3000
Cash Sales: $6000 Sales to Customers: $ 6000
Cust. Dep.: $1000
Expenses: $4000 Expenses: $4000
Inventory Purchases: $1000 Cost of Sales:
Wages Paid: $600 Wages Expenses: $600
Utilities Expense: $200

Cash Income: $4400 Net Income: $4200


Is this correct?

[morgaine300]

Please start your own thread instead of tagging onto other people's. I've moved all of your posts into their own threads.

Also please do not double post. It just confuses people and won't help.

[morgaine300]

I'm not following your work cause columns don't stay. Use dots... or something.

But the answers are incorrect. I just can't fully tell you why. I can tell you that the $4000 isn't an expense either way. Why are you putting the $3000 net sales revenue under cash and then also including the $6000 that was received? Same thing under accrued - you're duplicating things.