Unearned Revenue
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The following service contracts, for which Padres Co receives full pymnt on the contract date, have been entered into with special customers:
Date Amt Term
7/1/05 $70,000 35 months
10/1/05 $100,000 25 months
4/1/06 $120,000 40 months
Padres Co completes work on the contracts evenly over the life of each contract and their fiscal year ends 12/31.
Compute the balance of unearned service revenue and the amount of unearned service revenue classified as currently liability at :
1) 12/31/05
2) 12/31/06
3) 12/31/07
CLUE must match: The sum of Long Term Liabilities at 12/31/05, 12/31/06, and 12/31/07 is $162,000.
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Solution Summary
The solution explains how to calculate the balance in the unearned revenue account given the completion of a project.
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Since the contracts are evenly spread over the life, we can find the ...
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