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Greene Company sells office equipment service contrac agreeing to service equipment for a two-year period. Ca receipts from contracts are credited to unearned contra revenue. Service contract costs are charged to service contr: Ovn engo

Greene Company sells office equipment service contrac agreeing to service equipment for a two-year period. Ca receipts from contracts are credited to unearned contra revenue. Service contract costs are charged to service contr: Ovn engo

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 1-18 (AICPA Adapted) Greene Company sells office equipment service contracts agreeing to service equipment for a two-year period. Cash receipts from contracts are credited to unearned contract revenue. Service contract costs are charged to service contract expense as incurred. Revenue from service contracts is recognized as earned over the term of the contracts. Unearned contract revenue at January 1 Cash receipts from service contracts sold Service contract revenue recognized Service contract expense 600,000 980,000 860,000 520,000 What is unearned service contract revenue on December 31? a. 460,000 b. 480,000 c. 490,000 d. 720,000.
Transcribed Image Text:Problem 1-18 (AICPA Adapted) Greene Company sells office equipment service contracts agreeing to service equipment for a two-year period. Cash receipts from contracts are credited to unearned contract revenue. Service contract costs are charged to service contract expense as incurred. Revenue from service contracts is recognized as earned over the term of the contracts. Unearned contract revenue at January 1 Cash receipts from service contracts sold Service contract revenue recognized Service contract expense 600,000 980,000 860,000 520,000 What is unearned service contract revenue on December 31? a. 460,000 b. 480,000 c. 490,000 d. 720,000.
Problem 1-19 (AICPA Adapted) Ryan Company sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Čash receipts from contracts are credited to unearned contract revenue. This account had a balance of P720,000 on December 31, 2020 before year-end adjustment. Service contract costs are charged as incurred to service contract expense account which had a balance of P180,000. Outstanding servicé contracts on December 31, 2020 expire during 2021 P150,000, during 2022 P225,000 and during 2023 P100,000. What amount should be reported as unearned contract revenue on December 31, 2020? а. 540,000 b. 475,000/ с. 295,000 d. 245,000 25
Transcribed Image Text:Problem 1-19 (AICPA Adapted) Ryan Company sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Čash receipts from contracts are credited to unearned contract revenue. This account had a balance of P720,000 on December 31, 2020 before year-end adjustment. Service contract costs are charged as incurred to service contract expense account which had a balance of P180,000. Outstanding servicé contracts on December 31, 2020 expire during 2021 P150,000, during 2022 P225,000 and during 2023 P100,000. What amount should be reported as unearned contract revenue on December 31, 2020? а. 540,000 b. 475,000/ с. 295,000 d. 245,000 25
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