Question

The following activities occurred in 2019: Performed advertising services on account, $63,400. Received cash payments on account, $12,200. Received deposits from customers for advertising services to be performed in 2020, $3,700. Made payments to suppliers on account, $5,300. Incurred $51,900 of operating expenses; $45,000 was paid in cash and $6,900 was on account and unpaid as of the end of the year. What is the amount of revenue that will be reported on the income statement for the year ended December 31, 2019

Answer 1

$63,400

Step-by-step explanation:

Revenue is recorded during the financial year when incurred. So, consider only those items related to revenue that were incurred in 2019. The only revenue item incurred in 2019 is Advertising Services on Account of $63,400.

Cash Receipt of $12,200 is cash payment for revenue already recorded.

Deposits for Services not yet performed is a Liability and will be recognized as revenue when the services are performed. That is control of goods or service is transferred to the customer.