Prepare 3 income statements for the year assuming that revenue is to be recognized when: 1. Crocodiles have been caught (i.e. production complete). 2. Crocodiles have been sold and delivered 3. Cash collections are complete

 

During its first year, the company spent approximately $390,000 to catch 600 crocodiles. Of these, 400 crocodiles were sold and shipped to customers at a selling price of $1,250 per crocodile. Shipping costs of $100 per crocodile were paid for during the year. Customers were given liberal credit terms and only $300,000 from an equivalent 300 customers was collected during the first year. Ms. Grace estimated that as much as 20% of the sales price will be spent on collection costs and bad debts expenses.