BC Company sells equipment service contracts that cover a two-year period. The sales price of each contract is P 600. ABC'S 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. ABC sold 1,000 contracts evenly throughout 20x8. In its December 31, 20x8 balance sheet, what amount should ABC report as deferred service contract revenue? __________ In its December 31, 20x9 income statement, what amount should ABC report as service contract revenue?
BC Company sells equipment service contracts that cover a two-year period. The sales price of each contract is P 600. ABC'S 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. ABC sold 1,000 contracts evenly throughout 20x8. In its December 31, 20x8 balance sheet, what amount should ABC report as deferred service contract revenue? __________ In its December 31, 20x9 income statement, what amount should ABC report as service contract revenue?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- ABC Company sells equipment service contracts that cover a two-year period. The sales price of each contract is P 600. ABC'S 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. ABC sold 1,000 contracts evenly throughout 20x8.
In its December 31, 20x8
In its December 31, 20x9 income statement, what amount should ABC report as service contract revenue? ___________
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