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
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 63P
Related questions
Question
Solve and explain the reason why it is the answer.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you