Dexter 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 credited to unearned service contract revenues.This account had a balance of $480,000 at December 31, 2006 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, 2006.Outstanding service contracts at December 31, 2006 expire as follows:

$\frac{\text { During 2007 }}{\$ 100,000} \quad \frac{\text { During 2008 }}{\$ 160,000} \quad \frac{\text { During 2009 }}{\$ 70,000}$

What amount should be reported as unearned service contract revenues in Dexter's December 31, 2006 balance sheet?

Question

Dexter 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 credited to unearned service contract revenues.This account had a balance of $480,000 at December 31, 2006 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, 2006.Outstanding service contracts at December 31, 2006 expire as follows:

\frac{\text { During 2007 }}{\$ 100,000} \quad \frac{\text { During 2008 }}{\$ 160,000} \quad \frac{\text { During 2009 }}{\$ 70,000}

What amount should be reported as unearned service contract revenues in Dexter's December 31, 2006 balance sheet?

$\frac{\text { During 2007 }}{\$ 100,000} \quad \frac{\text { During 2008 }}{\$ 160,000} \quad \frac{\text { During 2009 }}{\$ 70,000}$

What amount should be reported as unearned service contract revenues in Dexter's December 31, 2006 balance sheet?

Quizplus · Accepted Answer

The Answer of Dexter 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 credited to unearned service contract revenues.This account had a balance of $480,000 at December 31, 2006 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, 2006.Outstanding service contracts at December 31, 2006 expire as follows:

$\frac{\text { During 2007 }}{\$ 100,000} \quad \frac{\text { During 2008 }}{\$ 160,000} \quad \frac{\text { During 2009 }}{\$ 70,000}$

What amount should be reported as unearned service contract revenues in Dexter's December 31, 2006 balance sheet?