Question

In the Month of March, Chester received orders of 101 units at a price of $15.00 for their product Cute. Chester uses the accrual method of accounting and offers 30 day credit terms. Chester delivers 101 units in April. They received payment for 51 units in March, and 51 units in April. In the March income statement, how much revenue is recognized on the March income statement from this order? How much in the April Income statement?

a. $780, $780.b. $1,560, $780.c. $2,340, 0.d. 0, $2,340.

Answer 1

$765 and $765

Step-by-step explanation:

The computation of the revenue recognized in the march and april income statement is as follows

As in the march, the 51 units payment would received

So it would be

= 51 units × $15

= $765

Also in the april month, the other 51 units payment would be received

So it would be

= 51 units × $15

= $765

And we assume the order is received is of 102 units not 101 units

Therefore this is the answer but the same is not provided in the given options