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Can some please tell me what amount would I record as my revenue if the financial year ended is 30 June;

Lara Keeling's Profile

On 16 May 20X7, an order was received for five (5) pizza ovens at R15 000 each from an existing customer, together with a deposit of R7 500. The production of the pizza ovens was not completed by 30 June 20X7 and costs incurred amounted to R50 000. The pizza ovens were available for delivery on 11 July 20X7, but were delivered according to the request of the customer on 22 July 20X7.

Answers

Jim Schwartz
Title: Corporate financial advisor
Company: Wabash Financial Strategies
(Corporate financial advisor, Wabash Financial Strategies) |

Disclaimer: I am not an accountant. But, I would use logic to answer your question.

An order is not a revenue producing event. There was zero sales revenue (an income statement item) from this batch of pizza ovens in fiscal year 20X7. There would be work in process inventory (WIP), an asset, that grew by the 50,000 of costs incurred. There is also deferred revenue (the 7500 deposit), a liability incurred by the company when it accepted the deposit and agreed to deliver goods at a later date.

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