Question

In March, Digby received an order of 103 units at the price of $26.00 for their product Daze, and in April receives an order for 48 units of product Dixie at $36.50. Digby uses the accrual method of accounting and offers 30-day credit terms. Digby delivers zero units in March, 103 units in April, and 48 units in May. How much revenue is recognized on March’s income statement? How much revenue is recognized on April’s income statement?

Answer 1

March revenue is zero and the April revenue is $2678.

Step-by-step explanation:

In March, the ordered received = 103 units at $26

In April, the order received = 48 units at $36.50

Order delivered by Digby in march = 0

Order delivered in April = 103 units

Order delivered in may = 48 units

The revenue of March will be zero because it has not delivered the product in march so the revenue will be zero in march.

Revenue of April = 103×26 = $2678