In the month of March the Chester Corporation received and delivered orders of 1

Question

In the month of March the Chester Corporation received and delivered orders of 146,000 units at a price of $15.00 for revenue of $2.190mil for their product Clack. Chester uses the accrual method of accounting and offers 30 day credit terms. By the end of May Chester had collected payments of $2.190mil for the March deliveries. How much of the collected $2.190mil should Chester show on the March 31st income statement and how much on the May 31st income statement?

$0.723mil in March;
$1.467mil in May

$0.723mil in March;
$1.467mil in May

Explanation / Answer

$2.190mil in March;
$0 in May

Under the accrual method of accounting the revenue is reported in the accounting period in which the revenue earned not the period in which it is paid. so It will be march sales not May Sales.

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