a. Business receives $3,000 on January 1 for 10-month service contract for the period January 1 through October 31. (When the cash was received on January 1 assume that a liability account was credited. Assume services are performed evenly each month throughout the term of the contract.)

Deffered revenue means when an organization receives the payment prior to the goods delivered to conusmer. In the given case, business receives $3000 on 1, January for ten month service (From january to October).

The revenue per month needs to be calculated:

Revenue per month = Revenue for ten months divided by Total number of months

By putting the figures we get,

Revenue per month = $3000 divided by 10 = $300 per month

An adjusting entry needs to be passed:

Date Particulars debit credit

31st jan Unearned Revenue $300

Service Revenue $300

( Service revenue that has been collected in advance)

a. Business receives $3,000 on January 1 for 10-month service contract for the period January 1 through October 31. (When the cash was received on January 1 assume that a liability account was credited. Assume services are performed evenly each month throughout the term of the contract.)​

Respuesta :

Otras preguntas

a. Business receives $3,000 on January 1 for 10-month service contract for the period January 1 through October 31. (When the cash was received on January 1 assume that a liability account was credited. Assume services are performed evenly each month throughout the term of the contract.)