$1.170mil in March; $1.170mil in May $0 in March; $2.340mil in May $2.340mil in

Question

$1.170mil in March;
$1.170mil in May

$0 in March;
$2.340mil in May

$2.340mil in March;
$0 in May

In the month of March the Baldwin Corporation received and delivered orders of 156,000 units at a price of $15.00 for revenue of $2.340mil for their product Baker. Baldwin uses the accrual method of accounting and offers 30 day credit terms. By the end of May Baldwin had collected payments of $2.340mil for the March deliveries. How much of the collected $2.340mil should Baldwin show on the March 31st income statement and how much on the May 31st income statement? Select: 1

$1.170mil in March;
$1.170mil in May

$0 in March;
$2.340mil in May

$2.340mil in March;
$0 in May

$0.772mil in March;
$1.568mil in May

Explanation / Answer

Under accrual method revenue is recognized when earned irrespective of date of receipts of amount. $2.340mil in March $0 in May

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