The following transactions occurred during July:
(1) Received $700 cash for photography services provided to customer during the month.
(2) Received $1,500 cash from Barbara Hanson, the owner of the business.
(3) Received $800 from a customer in partial payment of his account receivable which arose as a result of sales during June.
(4) Rendered photography services to a customer on credit, $500.
(5) Borrowed $2,500 from the bank by signing a promissory note.
(6) Received $1,000 from a customer in payment for services to be rendered next year.
What was the amount of revenue for July?
A) $7,000.
B) $5,500.
C) $3,000.
D) $2,000.
E) $1,200.
4000
To determine the amount of revenue for July, we need to identify the transactions that represent revenue. Revenue is generated by providing goods or services to customers and receiving payment for them.
Based on the given transactions:
1) Transaction (1) states that $700 cash was received for photography services provided to a customer during July. This transaction represents revenue.
2) Transaction (4) states that photography services were provided to a customer on credit for $500. Since no cash was received, this transaction does not represent revenue.
3) Transaction (6) states that $1,000 was received from a customer in payment for services to be rendered next year. Since the services are not rendered in July, this transaction does not represent revenue.
Therefore, the total revenue for July is $700 (from transaction 1).
The correct answer is D) $700
To calculate the amount of revenue for July, we need to consider the cash received for photography services provided during the month.
The transactions that involve cash received for photography services during July are:
(1) Received $700 cash for photography services provided to customer during the month.
From this transaction, we know that $700 cash was received for photography services provided.
Therefore, the amount of revenue for July is $700.
So the correct answer is:
A) $7,000.