In the Month of March, Baldwin Corporation received orders of 175 units at a pri
ID: 2403038 • Letter: I
Question
In the Month of March, Baldwin Corporation received orders of 175 units at a price of $15.00 for their product Brat. Baldwin uses the accrual method of accounting and offers 30 day credit terms. Baldwin delivers 116 units in March and the balance of 58 units in April. They received payment for 58 units in March, 58 units in April, and 58 units in May. How much revenue is recognized on the March income statement from this order? How much in the April Income statement? (Answer in thousands)
$870, $870
0, $2625
$1740, $870
$2625, 0
Explanation / Answer
Answer = $ 1740, $ 870
116 × $ 15 = $ 1740 revenue for the month march
58 ×$ 15 = $ 870 revenue for the month march
In case of accural system of accountinging revenue is recognised when it accrues or as soon as transaction happens not when cash is actually relalised