During 2010, Hamot Company Sold $30,000 of Computer Chips to a Distributor

question 87

Essay

During 2010, Hamot Company sold $30,000 of computer chips to a distributor on account. The distributor planned to sell those chips to a German company. The sold chips were shipped to a warehouse owned by Hamot and were still there on December 31, 2010. Hamot's CFO left two messages for the distributor but received no return calls. The distributor has had no prior dealings with Hamot or any other manufacturer of computer chips. None of the past due balance of $30,000 has been paid. How much sales revenue associated with this transaction would be reported on the income statement for the year ending December 31, 2010? Explain your selection.

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Definitions:

Net Fixed Assets

The total value of a company's physical assets (like machinery, buildings, equipment) minus depreciation, indicating the net book value of physical assets.

Net Income

A business's residual profit after all operational costs and tax charges are extracted from its total revenues.

Common-Size Statement

A financial statement in which all items are expressed as a percentage of a common base figure, facilitating comparison across different periods or companies.

Net Fixed Assets

The value of a company’s long-term, tangible assets minus any depreciation, representing the net book value of physical assets.