15. Revenue and Expense Recognition

Columbia, Inc. had the following transaction in February:

1. Columbia sold inventory for $7,200. $3,500 was received in cash and the remainder was on account. The inventory cost was $4,000.
2. Columbia purchased new inventory costing $6,000. $3,000 was paid in cash and the remainder was on account.
3. Columbia paid $1,200 for February wages and an additional $400 for wages incurred in the last week of January. $300 of wages incurred in the last week of February will be paid March 5.
4. Columbia received $1,000 from customers at deposits on orders to be delivered March 9.
5. Columbia collected $800 on accounts receivable.

Columbia should report how much revenue in February?

1. $7,200
2. $5,300
3. $8,000
4. $9,000
5. None of the above

Columbia should report how much expense in February?

1. $11,200
2. $5,900
3. $5,500
4. $5,200
5. None of the above