In the Month of March, Baldwin Corporation received orders of 175 units at a price of $15.00 for their product Bill. 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

Question

Business

Parker House

18 February, 18:34

In the Month of March, Baldwin Corporation received orders of 175 units at a price of $15.00 for their product Bill. 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

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BB · Answer 1

Revenue is recognized on the March income statement from this order: $1,740

Revenue is recognized on the April income statement from this order: $870

Explanation:

Baldwin uses the accrual method of accounting - an accounting method that revenue or expenses are recorded when a transaction occurs rather than when payment is received or made.

Baldwin delivers 116 units in March. Revenue is recognized on the March income statement = 116 x $15.00 = $1,740

Baldwin delivers 58 units in April. Revenue is recognized on the March income statement = 58 x $15.00 = $870