Question

The following transactions occurred during July: Received $960 cash for services provided to a customer during July. Received $3,200 cash investment from K. Peterson, the owner of the business Received $810 from a customer in partial payment of his account receivable which arose from sales in June. Provided services to a customer on credit, $435. Borrowed $6,600 from the bank by signing a promissory note. Received $1,310 cash from a customer for services to be rendered next year. What was the amount of revenue for July

Answer 1

Answer: $1,395

Explanation:

Not all the above can be counted as Revenue so first I will differentiate them to make calculating revenue easier.

a) Received $960 cash for services provided to a customer during July.

- This is Revenue as it was received in payment of work done.

b) Received $3,200 cash investment from K. Peterson, the owner of the business.

- This is an Investment into the business and so is NOT Revenue.

c) Received $810 from a customer in partial payment of his account receivable which arose from sales in June.

- This is NOT Revenue but is the settling of an Accounts Receivables.

d) Provided services to a customer on credit, $435.

- This is Revenue as it is rendered for services provided.

e) Borrowed $6,600 from the bank by signing a promissory note.

- This is NOT Revenue as it was long term borrowing.

f) Received $1,310 cash from a customer for services to be rendered next year.

- This is NOT Revenue as it is Prepaid Revenue.

Adding up those considered Revenue we have,

= 960 + 435

= $1,395

$1,395 is the amount of Revenue in July.

Answer 2

Answer:

Total Amount of revenue fot the month of July=  

  Service recvenue                                 $960

  Credit service provided                          435

                                                                    $1,395

Explanation:

The amount received from K. Peterson is an investment in the business therefore it is not revenue to the business.

Amount received from last month sales cannot be regarded as revenue for the this month of July using matching concept.

Amount received from borrowing from bank is not sales revenue therefore it cannot bve regarded as revenue for the month

Amount received from the services to be rendered next month cannot be regarded as July Revenue but August revenue using matching concept. In July, this amount will be regarded as Unearned revenue.