Question

Accrued Revenue An electrical company provides services for a new building at a rate of $50 per hour. Once completed, the owner of the building will pay for the total amount of hours worked. By the end of the year, the electrical company has worked 150 hours at the building and expects to finish the project after working an additional 50 hours in the next period. Calculate the accrued revenue the electrical company should record.

Answer 1

To calculate the accrued revenue for the electrical company, multiply the total hours worked that have not yet been paid (150 hours) by the hourly rate ($50), resulting in $7,500 of accrued revenue.

Step-by-step explanation:

The question involves calculating the accrued revenue for an electrical company that has provided services but has not yet received payment. The company charges $50 per hour and has worked 150 hours by the end of the year, with an additional 50 hours expected to be worked in the next period. To calculate the accrued revenue:

1. Identify the total number of hours worked but not yet paid for, which is 150 hours.
2. Multiply the number of hours by the hourly rate of $50 to determine the accrued revenue.

The calculation will be as follows:

Accrued Revenue = Total Hours Worked × Hourly Rate

= 150 hours × $50/hour

= $7,500

This amount represents the revenue that the electrical company has earned but has not yet received payment for by the end of the year.