Felton 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, 2010 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, 2010.Outstanding service contracts at December 31, 2010 expire as follows: What amount should be reported as unearned service contract revenues in Felton's December 31, 2010 statement of financial position?

Question

Felton 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, 2010 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, 2010.Outstanding service contracts at December 31, 2010 expire as follows:  What amount should be reported as unearned service contract revenues in Felton's December 31, 2010 statement of financial position?

Quizplus · Accepted Answer

The Answer of Felton 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, 2010 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, 2010.Outstanding service contracts at December 31, 2010 expire as follows:  What amount should be reported as unearned service contract revenues in Felton's December 31, 2010 statement of financial position?

Felton CoSells Major Household Appliance Service Contracts for Cash