Income determination problem

  • Creator
    Topic
  • #845199
    vodrldnr
    Participant

    On October 1, year 1, Acme Fuel Co. sold 100,000 gallons of heating oil to Karn Co. at $3 per gallon. Fifty thousand gallons were delivered on December 15, year 1, and the remaining 50,000 gallons were delivered on January 15, year 2. Payment terms were: 50% due on October 1, year 1, 25% due on first delivery, and the remaining 25% due on second delivery. What amount of revenue should Acme recognize from this sale during year 1?

    A. $ 75,000
    B. $150,000
    C. $225,000
    D. $300,000

    anser is B. yep I got it. revenue is recognized when earned and realized

    but I came to question.. what if there is sales terms 2/10 and the buyer makes the payment bore 10 days after the purchase date?

    in this situation, will the year 1 sales revenue be subtracted by the sales discount (contra revenue account ) by 2% ???

    this is just what if question..

    It ain't About How Hard You Hit
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