3. What is the contract revenue for 2021? 4. What is the contract revenue for 2022?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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3. What is the contract revenue for 2021?

4. What is the contract revenue for 2022?

Dunne Company sells equipment service contracts that cover a two-year period. The sale
price of each contract is P600. The past experience is that, of the total pesos spent for
repairs on service contracts, 40% is incurred evenly during the first contract year and
60% evenly during the second contract year. The entity sold 1,500 contracts evenly
throughout 2020.
Transcribed Image Text:Dunne Company sells equipment service contracts that cover a two-year period. The sale price of each contract is P600. The past experience is that, of the total pesos spent for repairs on service contracts, 40% is incurred evenly during the first contract year and 60% evenly during the second contract year. The entity sold 1,500 contracts evenly throughout 2020.
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