Question

In the Month of March, Baldwin received orders of 166 units at a price of $15.00 for their product Bold, and in April receives an order for 42 units of their product Bold at $15.00. Baldwin uses the accrual method of accounting and offers 30 day credit terms. Baldwin delivers 0 units in March, 166 units in April and 42 units in May. They received payment for 166 units in April, and payment for 42 units in May. How much revenue is recognized on the March income statement from this order? How much in the April Income statement? (Answer in thousands)

Answer 1

May accrued revenue:

0 units delivered

April accrued revenue

166 units delivered at $15: 2,490

Step-by-step explanation:

Cash proceeds:

March Request 166 units at $15 = 2,490

April Request 42 units at $15 = 630

Accrual method:

the accrual method will recognize revenue when it is earned, which in this case is represent by the delivery of the goods.

May accrued revenue:

0 units delivered

April accrued revenue

166 units delivered at $15: 2,490