2.Transaction of exchange is noted
3.Revenue is recognized
4.Process is completed
M3-2 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.
Complete the following statements:
Cash Basis Income StatementAccrual Basis Income Statement
Cash Sales$6,000.00 Sales to customers $6,000.00
Expenses:$200.00 Expenses: $1,000.00
Inventory Purchases$4,000.00 Cost of Sales $0.00
Wages Paid$600.00 Wages Expenses $600.00
Utilities Expenses $0.00
Cash Income$2,200.00 Net Income $5,600.00
Week Three Textbook Assignment – Troy Ives
Prepare responses to Part A of Problem 1-30A from Ch. 1 of Fundamentals of Financial Accounting Concepts. PROBLEM 1–30A Interrelationships among Financial Statements O’Shea Enterprises started the 2002 accounting period...