Question

In the Month of March, Chester Corporation received orders of 126 units at a price of $15.00 for their product Clack. Chester uses the accrual method of accounting and offers 30 day credit terms. Chester delivers 84 units in March and the balance of 42 units in April. They received payment for 42 units in March, 42 units in April, and 42 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)

Answer 1

Answer:

$1,260; $630

Explanation:

Given that,

Chester Corporation received order = 126 units at a price of $15.

Units delivers in March = 84 units

Units delivers in April = 42 units

Revenue recognized on the March income statement from this order:

= Number of units delivers × Price of each unit

= 84 units × $15

= $1,260

Revenue recognized on the April income statement from this order:

= Number of units delivers × Price of each unit

= 42 units × $15

= $630