Ask Question
BusinessBusiness
23 January, 08:45

Rhonda Company enters into a contract with Petersburg, Inc. on March 5. According to the contract, Rhonda is scheduled to deliver 100 units of Product 1 at a sales price of $60 per unit and 150 units of Product 2 to Petersburg, Inc. by June 30 at a sales price of $75 per unit. Rhonda agrees to deliver both Products 1 and 2 before being entitled to any payments. The following deliveries are made by Rhonda to Petersburg: On March 25, Rhonda delivers 100 units of Product 1. On June 20, Rhonda delivers 150 units of Product 2. What amount (s) relating to this contract should Rhonda report on its March 31 balance sheet?

+5
Answers (2)
  1. 23 January, 09:06
    0
    Anw12e1 2e dwqd ffef ewke
  2. 23 January, 09:10
    0
    Rhonda should report Account Receivable of $6,000 in its balance sheet at 31st March.

    Explanation:

    According to commonly-applied accounting principles/standards; income should be recorded when they are earned (in this case, when the product is delivered), rather than the cash payment is received.

    By March 31st, Rhonda had already delivered all 100 units of Product 1 as agreed in the contract. As a result, they are eligible to record a revenue (credit side) of $6,000 (100 units x $60 each).

    As the cash receipt of $6,000 is not received, the Account Receivable should be recorded up by $6,000 to reflect the amount due from customers regarding the contract.

    Revenue will be reported in income statement while Account Receivable will be reported in Balance Sheet. Thus, Rhonda should report Account Receivable of $6,000 in its balance sheet at 31st March.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Rhonda Company enters into a contract with Petersburg, Inc. on March 5. According to the contract, Rhonda is scheduled to deliver 100 units ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
What will be the result when managers use new forms of organizing?
Answers (1)
You manage a $10 million portfolio, all invested in equities; the beta for your portfolio is 0.70. You believe the market is on the verge of a big but short-lived downturn;
Answers (1)
You can invest in taxable bonds that are paying a yield of 8.9 percent or a municipal bond paying a yield of 7.15 percent. Assume your marginal tax rate is 21 percent. Which security should you buy
Answers (1)
Chaz Denver Company has identified that the cost of a new computer will be $40,000, but with the use of the new computer, net income will increase by $5,000 a year. If depreciation expense is $3,000 a year, the cash payback period is
Answers (1)
Aneal is a very successful employee in the IT department. His supervisor wishes to recognize him with a promotion to give him more responsibilities, but knows Aneal does not want to manage other employees.
Answers (2)
New Questions in Business
Which financial problems might cause a person to be considered a bad risk for a loan to purchase a home? Check all that apply.
Answers (2)
Companies can adapt their catalog revenue model online by replacing or supplementing their print catalogs with information on their Web sites. True False
Answers (1)
The United Kingdom produces computers and sells them to Japan. At the same time Japan produces cars and sells them to the United Kingdom. Suppose there is an appreciation in the pound. This will cause: A.
Answers (1)
When obtaining a mortgage, in order to not be taken, paying a much higher rate than neccessary, which can easily cost well over 100,000 additional dollars over the life of the loan, the authors recommend getting a minimum of how many quotes?
Answers (1)
Amber wants to apply for a job vacancy. She calls the recruiter who advertised this vacancy to learn more about the job. The recruiter gives some background information about the positive and negative qualities of the job to Amber.
Answers (1)
Home » Business » Rhonda Company enters into a contract with Petersburg, Inc. on March 5. According to the contract, Rhonda is scheduled to deliver 100 units of Product 1 at a sales price of $60 per unit and 150 units of Product 2 to Petersburg, Inc.
Sign Up Forgot Password?