Snell Co
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Snell Co. performs and completes services for a client in May and bills the client $1,000. In June, the client makes a partial payment of $300 cash for the services. In July, the remaining $700 cash is paid. Determine the monthly revenue recorded in May, June, and July for this service
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Answer:
The financial statement performed by Snell Corporation shows how the revenue recognition provides financial statement users(i.e. the client that uses Snell Co. service in May, June, and July) with relevant information regarding the services associated with revenue from customer contracts.
In the given case, the Snell Co. service charge was hiked in May since the entire service income must be accounted for in May. The amount owed from a client is seen as a current asset on the balance sheet, and once the amount is received from a client, it is removed off from the current asset. Thus it is added to the zero dollars ($0) company's cash balance. In this case, the cash collected in June and July is not recorded as revenue.
We can conclude that the monthly revenue recorded from Snell Co. performance and services for the client in May, June, and July for this service is as follows:
Months Revenue
May $1000
June 0
July 0
