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21 July, 16:22

On September 1, Year 1, Great Lakes Equipment receives $24,000 from a customer for work to be performed evenly over the next 2 years. What is the amount of revenue that Great Lakes Equipment should recognize on the income statement for the year ending December Year 1?

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  1. 21 July, 16:35
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    Great Lakes should recognize on the income statement for the year ending December Year 1 $4,000

    Explanation:

    The income statement only recognize the amount of money that was generated during the period of the income statement.

    If the company invoiced by month, it only recognize the total amount for the last four months of the year.
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