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Motor Co. sells service contracts that cover a 2-year period. The sale price of each contract is P2,000. Motor Co. sold 1,000 contracts evenly throughout 20x1. Based on Motor Co.'s past experience, 40% of contracts sold are earned in the first year of the contract and 60% in the second year. Approximately, how much are the current and noncurrent portions of the deferred revenue on December 31, 20x1? a. 1,366,667; 550,000 b. 1,250,000; 630,000 c. 1,000,000; 600,000 d. 870,000; 430,000

Motor Co. sells service contracts that cover a 2-year period. The sale price of each contract is P2,000. Motor Co. sold 1,000 contracts evenly throughout 20x1. Based on Motor Co.'s past experience, 40% of contracts sold are earned in the first year of the contract and 60% in the second year. Approximately, how much are the current and noncurrent portions of the deferred revenue on December 31, 20x1? a. 1,366,667; 550,000 b. 1,250,000; 630,000 c. 1,000,000; 600,000 d. 870,000; 430,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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11. Motor Co. sells service contracts that cover a 2-year period. The sale price of each contract is P2,000. Motor Co. sold 1,000 contracts evenly throughout 20x1. Based on Motor Co.'s past experience, 40% of contracts sold are earned in the first of year the contract and 60% in the second year. Approximately, how much are the current and noncurrent portions of the deferred revenue on December 31, 20x1? a. 1,366,667; 550,000 b. 1,250,000; 630,000 c. 1,000,000; 600,000 d. 870,000; 430,000
Transcribed Image Text:11. Motor Co. sells service contracts that cover a 2-year period. The sale price of each contract is P2,000. Motor Co. sold 1,000 contracts evenly throughout 20x1. Based on Motor Co.'s past experience, 40% of contracts sold are earned in the first of year the contract and 60% in the second year. Approximately, how much are the current and noncurrent portions of the deferred revenue on December 31, 20x1? a. 1,366,667; 550,000 b. 1,250,000; 630,000 c. 1,000,000; 600,000 d. 870,000; 430,000
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