Rathbone Corp.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 Revenues.This account had a balance of $1,100,000 at December 31, 2017 before year-end adjustment.Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $325,000 at December 31, 2017.
Service contracts still outstanding at December 31, 2017 expire as follows:
What amount should be reported as Unearned Service Revenues on Rathbone's December 31, 2017 statement of financial position?

Question

Rathbone Corp.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 Revenues.This account had a balance of $1,100,000 at December 31, 2017 before year-end adjustment.Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $325,000 at December 31, 2017.
Service contracts still outstanding at December 31, 2017 expire as follows: 
What amount should be reported as Unearned Service Revenues on Rathbone's December 31, 2017 statement of financial position?

Quizplus · Accepted Answer

The Answer of Rathbone Corp.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 Revenues.This account had a balance of $1,100,000 at December 31, 2017 before year-end adjustment.Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $325,000 at December 31, 2017.
Service contracts still outstanding at December 31, 2017 expire as follows: 
What amount should be reported as Unearned Service Revenues on Rathbone's December 31, 2017 statement of financial position?