The following information describes the companyâs sales for the year:
a. A sale for $100,000 was made on March 23. As of the end of the year, all of the work associated with the sale has been completed. Unfortunately, the customer is a significant credit risk and the collection of the cash for the sale is very uncertain. No cash has been collected as of the end of the year.
b. A sale for $130,000 was made on July 12. The $130,000 cash for the sale was collected in full on July 12. The work associated with the sale has not yet begun, but is expected to be completed early next year.
c. A sale for $170,000 was made on November 17. No cash has been collected as of the end of the year, but all of the cash is expected to be collected early next year. As of the end of the year, all of the work associated with the sale has been completed.
How much revenue should be recognized for the year?
$170,000
$0
$400,000
$230,000
$270,000
$300,000
$130,000
$100,000
The following information describes the companyâs sales for the year:
a. A sale for $100,000 was made on March 23. As of the end of the year, all of the work associated with the sale has been completed. Unfortunately, the customer is a significant credit risk and the collection of the cash for the sale is very uncertain. No cash has been collected as of the end of the year.
b. A sale for $130,000 was made on July 12. The $130,000 cash for the sale was collected in full on July 12. The work associated with the sale has not yet begun, but is expected to be completed early next year.
c. A sale for $170,000 was made on November 17. No cash has been collected as of the end of the year, but all of the cash is expected to be collected early next year. As of the end of the year, all of the work associated with the sale has been completed.
How much revenue should be recognized for the year?
| $170,000 $0 $400,000 $230,000 $270,000 $300,000 $130,000 $100,000 |
Related questions
Schedule of Cash Collections of Accounts Receivable
Pet Stop Inc., a pet wholesale supplier, was organized on May 1.Projected sales for each of the first three months of operationsare as follows:
| May | $170,000 |
| June | 220,000 |
| July | 330,000 |
All sales are on account. Of sales on account, 51% are expectedto be collected in the month of the sale, 44% in the first monthfollowing the sale, and the remainder in the second month followingthe sale.
Prepare a schedule indicating cash collections from sales forMay, June, and July.
| PET STOP INC. | |||
| Schedule of Collections from Sales | |||
| For the Three Months Ending July 31 | |||
| May | June | July | |
| May sales on account: | |||
| Collected in May | |||
| Collected in June | |||
| Collected in July | |||
| June sales on account: | |||
| Collected in June | |||
| Collected in July | |||
| July sales on account: | |||
| Collected in July | |||
| Total cash collected | $ | $ | $ |
Schedule of Cash Collections of Accounts Receivable
Pet Stop Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows:
| May | $280,000 |
| June | 350,000 |
| July | 510,000 |
All sales are on account. Of sales on account, 53% are expected to be collected in the month of the sale, 43% in the first month following the sale, and the remainder in the second month following the sale.
Prepare a schedule indicating cash collections from sales for May, June, and July.
| PET STOP INC. | |||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Collections from Sales For the Three Months Ending July 31
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