Question

On January 15, 2021, Bella Vista Company enters into a contract to build custom equipment for ABC Carpet Company. The contract specified a delivery date of March 1. The equipment was not delivered until March 31. The contract required full payment of $75,000 30 days after delivery. The revenue for this contract should be:________.recorded on April 30, 2021.

recorded on March 31, 2021.
recorded on January 15, 2021.
recorded on March 1, 2021.

Answer 1

Option B-Recorded on March 31, 2021

Step-by-step explanation:

The reason is that when the product is not actually delivered the company can not recognize the revenue just because the contract has been formed. So the company will only recognize the revenue when it will deliver its part to the customer which is the consideration (something that can be valued in $) delivery made to the customer. So the date that the consideration was paid to customer was the delivery receipt date which is March 31, 2021