Question

The following transactions were selected from the records of Evergreen Company:

July 12 Sold merchandise to Wally Butler, who paid the $940 purchase with cash. The goods cost Evergreen Company $570.
16 Sold merchandise to Claudio’s Chair Company at a selling price of $4,940 on terms 3/10, n/30. The goods cost Evergreen Company $3,470.
19 Sold merchandise to Otto’s Ottomans at a selling price of $2,970 on terms 3/10, n/30. The goods cost Evergreen Company $1,870.
23 Received cash from Claudio’s Chair Company for the amount due from Jul-16.
31 Received cash from Otto’s Ottomans for the amount due from July Jul-19.
Required:

Compute the amount of revenue to be reported for the month ended July 31. (Round your answer to 2 decimal places.)

Answer 1

Answer:

The amount of revenue to be reported for the m/o July -31 = $8850.

Explanation:

July-12.  Account Receivable = $ 940

July-16. Account Receivable = $ 4940

July-19. Account Receivable  = $ 2970

July-23. Account Receivable =   (4940-4940)=$0 (due to cash received)

July-31. Account receivable=  (2970-2970)=$0. (due to cash received)

Sales

Sales to wally = $940

Sales to Claudio = $4940

Sales to Otto = $2970

Total sales = $8850.

Cost of goods sold

Cost of sales to wally = $570

Cost of sales to Claudio = $3470

Cost of sales to Otto =  $1870

 Total Cost of sales       $5910

Gross profit = Sales - cost of sales = 8850 - 5910 = $ 2940.

Answer 2

The amount of revenue to be reported for the month ended July 31 by Evergreen Company is $8,850.

What is revenue recognition?

Revenue recognition means determining when and the amount at which revenue is recognized.  Revenue recognition must accord with the generally accepted accounting principles on the subject.

Revenue is recognized when it is earned, and this must be reported or recorded in the period in which the earning occurs.

Data and Calculations:

July 12 Cash sales to Wally Butler = $940

July 16 Credit sales to Claudio's Chair Company = $4,940

July 19 Credit sales to Otto's Ottomans = $2,970

Total Sales Revenue = $8,850

Thus, the amount of revenue to be reported for the month ended July 31 by Evergreen Company is $8,850.

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