In the Month of March, Baldwin received orders of 115 units at a price of $15.00
ID: 2768396 • Letter: I
Question
In the Month of March, Baldwin received orders of 115 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 115 units in April. They received payment for 58 units in March, and 58 units in April. In the March income statement, how much revenue is recognized on the March income statement from this order? How much in the April Income statement? (Answer in thousands)
Select: 1
0, $1,725
0, $863
$863 , $863
$1,725 , 0
Explanation / Answer
Under accrual method of accounting, revenue is recognized when the sale is made not when the payment received.
Here, 115 units were delivered in April. Hence, Total revenue should be recognized in the same month. No revenue will be recognized in the month of March.
Hence, correct option is $0, $1,725