Klope sells major household appliance service contracts for cash. The service contracts are for one-year, two-year or three-year period. Cash receipts from contracts are credited to unearned service contracts revenues. This account had a balance of P600,000 at December 31, 2020 before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of P150,000 at December 31, 2020. Outstanding service contracts at December 31, 2020 are as follows: During 2021 During 2022 During 2023 P125,000 P200,000 P90,000 What amount should be reported as unearned service contract revenues in Klope's December 31, 2020 balance sheet? a. P415,000 b. P450,000 c. P275,000 d. P300,00
Klope sells major household appliance service contracts for cash. The service contracts are for one-year, two-year or three-year period. Cash receipts from contracts are credited to unearned service contracts revenues. This account had a balance of P600,000 at December 31, 2020 before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of P150,000 at December 31, 2020. Outstanding service contracts at December 31, 2020 are as follows:
During 2021 During 2022 During 2023
P125,000 P200,000 P90,000
What amount should be reported as unearned service contract revenues in Klope's December 31, 2020
a. P415,000 b. P450,000 c. P275,000 d. P300,000
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