Question

Skidmore Music Company had the following transactions in March: a. Sold instruments to customers for $16,000; received $10,100 in cash and the rest on account. The cost of the instruments was $8,600 b. Purchased $3,100 of new instruments inventory, paid $1,500 in cash and owed the rest on account. " c. Paid $580 in wages to employees who worked during the month. d. Received $3,500 from customers as deposits on orders of new instruments to be sold to the customers in April. e. Received a $210 bill for March utilities that will be paid in April Complete the following statements: Answer is complete but not entirely correct. Accrual Basis Income Statement Revenues Sales to customers 16,000 Cash Basis Income Statement Revenues Cash sales $ 10,100 Customer deposits 3,500 Expenses Inventory purchases 1,500 Wages paid 580 3.100 Expenses Cost of sales Wages expense Uites expense Net income 210 12.110 Net income $ 11,520 $

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Red Answers are highlighted in yellow: Solution: Accrual basis Income statement Revenues: Sales to customers $ 16,000 Expenses: Cost of sales Wages expense Utilities expense Net Income $ $ $ $ 8,600 580 210 6,610 (16000-8600-580-210)