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Adkins Company is hired on December​ 15, 2018 to perform​ services, beginning on December​ 16, 2018. Under this​ agreement, Adkins will earn $ 4 comma 000 monthly and receive payment on January​ 15, 2019. What amount of service revenue should be recorded for the year ending December​ 31, 2018?

User Dtech
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Answer:

$2,000

Step-by-step explanation:

The amount which is to be recorded for the service revenue for the month of the December 2018 is computed as:

Service revenue = Monthly Salary / Number of days in the month of December × Number of days from being hired

where

Monthly salary is $4,000

Number of days in the month of December is 30 days

Number of days from being hired is 15 days (From 15 December to 30 December)

Service revenue = $4,000 / 30 days × 15 days

Service revenue = $133.33 × 15 days

Service revenue = $1999.95 or $2,000

Therefore, the service revenue for the month of December amounts to $2,000.

User Dale Marshall
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