Wallace Motors buys and sells used cars. Wallace made the following sales during
ID: 2491549 • Letter: W
Question
Wallace Motors buys and sells used cars. Wallace made the following sales during January and February: Three cars were sold to Russell Taxi for a total of $75,000; the cars were delivered to Russell on January 18. Russell paid Wallace $20,000 on January 18 and the remaining $55,000 on February 12. One car was sold to Hastings Classics for $24,000. The car was delivered to Hastings on January 25. Hastings paid Wallace on February 1. Required: Calculate the monthly revenue for Wallace for January and February. If answer is zero, enter "0".
Explanation / Answer
Based on accrual method of accounting sales will be recorded when the services is performed
And the seller price is fixed and determinable .In first case $75,000 cars were delivered on Jan 18 hence the transaction is complete on that date irrespective of the fact when cash is paid. Similarly in second case sale is said to take place on Jan 25
Hence January sales = $75,000 +24,000 = 99,000
Feb sales = $0
Based on accrual method of accounting sales will be recorded when the services is performed
And the seller price is fixed and determinable .In first case $75,000 cars were delivered on Jan 18 hence the transaction is complete on that date irrespective of the fact when cash is paid. Similarly in second case sale is said to take place on Jan 25
Hence January sales = $75,000 +24,000 = 99,000
Feb sales = $0
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