This paper circulates around the core theme of What amount should be reported as unearned service contract revenues in Smith’s December 31, 2013 balance sheet? together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Smith Co. sells major household appliance service contracts for cash.
The service contracts are for a one-year, two-year, or three-year
period. Cash receipts from contracts are credite
d to unearned service contract revenues. This account had a balance of
$480,000 at December 31, 2013 before year-end adjustment. Service
contract costs are charged as incurred to the service contract expense
account, which had a balance of $120,000 at December 31, 2013.
Outstanding service contracts at December 31, 2013 expire as follows:
During 2014 During 2015 During 2016
$100,000 $160,000 $70,000
What amount should be reported as unearned service contract revenues in Smith’s December 31, 2013 balance sheet?