Final answer:
The amount of Service Revenue to be reported on the income statement for 2019 for Ocean Consulting is the sum of cash received for services performed during the year ($16,000) and services billed but unpaid ($4,600), totaling $20,600.
Step-by-step explanation:
The student is asking about the amount of Service Revenue that will be reported on the income statement for Ocean Consulting for the year 2019. To calculate this, we need to consider only the revenue from services that were performed during the year, regardless of when the cash was received or billed. The cash received on February 1, 2019, is not included in the 2019 Service Revenue as it was for services performed prior to 2019. The cash received on November 1, 2019, is a prepayment for services to be performed in 2020 and thus is also not included in the 2019 Service Revenue. The total cash received for services performed during 2019 was $16,000. Additionally, the company billed $4,600 to clients for services performed in 2019, which should be included even though it was unpaid as of December 31, 2019. Therefore, the total Service Revenue for 2019 is the sum of these two figures: $16,000 + $4,600 = $20,600.The amount of Service Revenue reported on the income statement for the year 2019 can be calculated by adding the cash received for services performed during 2019 and the accounts receivable balance at the end of 2019.
In this case, the company received $16,000 in cash for services performed during 2019. Additionally, the company sent bills totaling $4,600 to clients for services performed during 2019, which were unpaid as of December 31, 2019. Therefore, the total Service Revenue reported on the income statement for the year 2019 is $20,600 ($16,000 + $4,600).