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    Mostert Music Company

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    Reporting Cash Basis versus Accrual Basis Income: LO1, LO2
    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 Statement

    Accrual Basis Income Statement

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    Reporting Cash Basis versus Accrual Basis Income: LO1, LO2
    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 ...

    Solution Summary

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

    $2.19

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