Question

Burke Enterprises sells toy flying saucers. The following information relates to toy sales during the month of June (the first month of operations) and to related cash transactions with customers. Behrend pays a sales commission of 1% of all sales, with payment in the month following the month of sale.

Toy sales for cash $ 18,000

Toy sales on account (credit sales) $ 42,000

Collections from customers for the credit sales $ 3,000

Deposits received from customers for orders to be filled in July $ 2,000

In the income statement for its first month, Burke should report sales revenue of
A. $60,000
B. $62,000
C. $23,000
D. $21,000

Answer 1

A. $60,000

Step-by-step explanation:

The computation of the sales revenue is shown below:

= Cash sales + credit sales

= $18,000 + $42,000

= $60,000

We simply added the cash sales and the credit sales in order to determine the sales revenue

hence, the correct option is A