In the month of March the Digby Corporation received and delivered orders of 189,000 units at a price of $15.00 for revenue of $2.835mil for their product Daze. Digby uses the accrual method of accounting and offers 30 day credit terms. By the end of May Digby had collected payments of $2.835mil for the March deliveries. How much of the collected $2.835mil should Digby show on the March 31st income statement and how much on the May 31st income statement?

Select: 1

	$0 in March; $2.835mil in May
	$0.936mil in March; $1.899mil in May
	$2.835mil in March; $0 in May
	$1.417mil in March; $1.417mil in May

2021 Income Statement 2021 Common Total (Product Name:) Dot 533,943 534,265 S49,470 552,154 Dell Dome SO S189.832 100.0% ariable Costs: Direct Labor Direct Material nventory Carry S3,645 3,828 510,088 S9,469 514,9 15,548 519,48 520,098 5552 518,857 19,623 530,084 530,119 50 so s27,030 570, 123 $1,510 S98.663 15.9% 41.3% 0.9% 58.1% 5246 otal Variabla 50 50 50 515,088 14,642 S19,406 522,035 50 SO S71.189 41.9% Period Costs: S4,753 5,357 S3,040 S3,547 50 $16,707 $2.824 55.200 $6,000 $1.929 $32.880 9.8% 1.7% 3.1% 3.5% 1.1% 19.2% GBA: R&D S1,300 S1,300 1,300 S1,300 Sales Total Period et Margin 51,800 51,800 51,400 51,400 5593 58,485 S9,102 7,268 S7,805 5562 50 S6,601 S5,540 12,138 514,230 50 $38,509 22.7% Definitions Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for LongTerm Interest each product. Other: Charges not included in other categories such as Fees, Write Offs, and TOM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and proft sharin $4,783 $33,728 $3.909 $11,420 $6,439 5239 $11,719 2.8% 19.9% 2.3% 6.7% 3.8% 0.1% 0.9% Short Term Interest Profit Sharing Net Profit Variable Margins 2008 Digby 400% 300% 20.0% 10.0% 0.0%