Question

Smith Dentistry opened on June 1, 2016. The following transactions occurred during June

1. Issued common stock to owners in exchange for $18,000 cash.

2. Purchased $4,500 of equipment, paying $1,350 cash and signing a promissory note for $3,150.

3. Received $8,100 in cash for dental services performed in June.

4. Purchased $1,350 of supplies on account, all of the supplies were used in June.

5. Provided dental services on account in the amount of $14,400.

6. Paid $675 on account

7. Paid $2,700 to employees for work performed during June.

8. Received a bill for utilities for June of $3,050, the bill remains unpaid.

What is the amount of total revenue to be reported on the income statement for the month of June? Multiple Choice

a. $22,500
b. $8,100
c. $40,500
d. $26,100

Answer 1

The total revenue for the month of June is $22500. Option a is the correct answer.

Step-by-step explanation:

The revenue will be calculated under the accrual basis of accounting which states that a period's revenue should match that period's expenses and these are to be recorded in their respective periods. Under this method, both the cash and the credit sales are recognized as revenue in the period to which they relate. The revenue for the month of June will be as follows,

Total Revenue = Cash sales + Credit sales

Total revenue = 8100 + 14400

Total revenue = $22500