# On January 1, 2020, Jim Beam Company sold goods to a customer and received an installment note...

## Question:

On January 1, 2020, Jim Beam Company sold goods to a customer and received an installment note requiring payments of $15,000 annually for six years. The first payment was received by Jim Beam Company on January 1, 2020. The prevailing rate of interest for this type of note is 8%. The total sales revenue Jim Beam Company would record for this sale on January 1, 2020 is: A)$90,000

B) $69,343 C)$74,891

D) $15,000 ## Sales Revenue: The sales revenue is the income received by selling the products or services or whatever the company is dealing with. The revenue is cash inflow without any deduction pf cost. ## Answer and Explanation: Total sales revenue = Current value of all installments So we will calculate the present value of all installments The formula to calculate the same= = Annual installment * PVA due factor (8%, 6) =$15,000 * 4.99

= $74,891 Hence, the sales revenue to be recorded is$74,891

How to Calculate Sales Revenue: Definition & Formula

from Financial Accounting: Help and Review

Chapter 5 / Lesson 27
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