Question

Skidmore Music Company had the following transactions in March: Sold instruments to customers for $16,100; received $11,600 in cash and the rest on account. The cost of the instruments was $8,500. Purchased $4,300 of new instruments inventory; paid $1,500 in cash and owed the rest on account. Paid $700 in wages to employees who worked during the month. Received $3,200 from customers as deposits on orders of new instruments to be sold to the customers in April. Received a $280 bill for March utilities that will be paid in April.
		Cash Basis Income Statement Accrual Basis Income Statement Revenues Revenues Cash sales Sales to customers Customer deposits Expenses Expenses Inventory purchases Cost of sales Wages paid Wages expense Utilities expense Net income Net income

Answer 1

Cash Basis
Income Statement
Revenues:
Cash sales	$       11,600
Customer deposits	$         3,200	$       14,800
Expenses:
Inventory purchases	$         1,500
Wages paid	$             700	$         2,200
Net Income		$       12,600
Accrual Basis
Income Statement
Revenues:
Sales to customers		$       16,100
Expenses:
Cost of sales	$         8,500
Wages paid	$             700
Utilities expense	$             280	$         9,480
Net Income		$         6,620