Question

On October 1, 2018, Acme Fuel Co. sold 100,000 gallons of heating oil to Sparky Co. at $3 per gallon. Fifty thousand gallons were delivered on December 15, 2018, and the remaining 50,000 gallons were delivered on January 15, 2019. Payment terms were 50% due on October 1, 2018, 25% due on first delivery, and the remaining 25% due on second delivery. What amount of revenue should Acme recognize from this sale during 2019?

Answer 1

sales revenue for this contract to be recognize in 2018: 150,000

Step-by-step explanation:

On 2019 the company will recognize revenue based on accrued revenue. It will consider the delivery date of the goods rather than payment.

During 2018 it delivers 50,000 gallons at $ 3 each

In total: 50,000 gallons x $ 3 = 150,000 accrued revenue.