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    Mostert Music Company

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    Mostert Music Company had the following transactions in March:
    1. 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.
    2. Purchased $4,000 of new instruments inventory; paid $1,000 in cash and owed the rest on account.
    3. Paid $600 in wages for the month.
    4. Received a $200 bill for utilities that will be paid in April.
    5. 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 Statement Accrual Basis Income Statement
    Revenues: Revenues:
    Cash Sales $ Sales to Customers $
    Customer's deposits
    Expenses: Expenses:
    Inventory Purchases Costs of sales
    Wages Paid Wages expense
    Utilities Expense
    Cash Income $ Net Income $

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    https://brainmass.com/business/accounting/mostert-music-company-226401

    Solution Preview

    Mostert Music Company had the following transactions in March:
    1. 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.
    2. Purchased $4,000 of new instruments ...

    Solution Summary

    This solution is comprised of a detailed explanation to complete the cash basis and accrual basis income statements.

    $2.19

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