Question

During its first year of operations, White Company bills credit customers $15,100 for services rendered. During the year, White receives $10,500 from all customers, $2,500 of which is received from cash customers. Required: What amount of revenue should be shown on the income statement for the year

Answer 1

Answer:

Total revenue = $17,600

Explanation:

Given:

Bills credit to customers during the year = $15,100

Receive amount from customer = $10,500

Amount received in cash = $2,500

Total revenue during the year =?

Computation of total revenue during the year:

According to the accrual basis of accounting, total revenue includes the sum of credit and cash sales.

Total revenue = Cash sales + Credit sales

Total revenue = $2,500 + $15,100

Total revenue = $17,600