NAPAPALUNOK AKO AS OF THE MOMENT INC. sells 3-year service contracts for air conditioning units for P1,500 each. Sales of service contracts are made evenly throughout each year. The company estimates that 15% of repairs are done in the first year from the date of sale, 35% in the second year, and 50% in the third year. Service contracts sold are as follows. How much is the unearned revenue from service contracts as of December 31, 2019? 1. Use the information given. How much revenue from service contracts is recognized in 2019? a. P204,750 b. P525,000 c. P729,750 d. P1,144,500 Use the information given. How much revenue from service contracts sold in 2019 is recognized in 2020? a. P682,500 b. P862,500 c. P955,500 d. P1,842,750
NAPAPALUNOK AKO AS OF THE MOMENT INC. sells 3-year service contracts for air conditioning units for P1,500 each. Sales of service contracts are made evenly throughout each year. The company estimates that 15% of repairs are done in the first year from the date of sale, 35% in the second year, and 50% in the third year. Service contracts sold are as follows. How much is the unearned revenue from service contracts as of December 31, 2019? 1. Use the information given. How much revenue from service contracts is recognized in 2019? a. P204,750 b. P525,000 c. P729,750 d. P1,144,500 Use the information given. How much revenue from service contracts sold in 2019 is recognized in 2020? a. P682,500 b. P862,500 c. P955,500 d. P1,842,750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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NAPAPALUNOK AKO AS OF THE MOMENT INC. sells 3-year service contracts for air conditioning units for P1,500 each. Sales of service contracts are made evenly throughout each year. The company estimates that 15% of repairs are done in the first year from the date of sale, 35% in the second year, and 50% in the third year. Service contracts sold are as follows. How much is the unearned revenue from service contracts as of December 31, 2019?
1. Use the information given. How much revenue from service contracts is recognized in 2019?
a. P204,750
b. P525,000
c. P729,750
d. P1,144,500
Use the information given. How much revenue from service contracts sold in 2019 is recognized in 2020?
a. P682,500
b. P862,500
c. P955,500
d. P1,842,750
Transcribed Image Text:2018
2019
2020
Number of service contracts sold
1,400
1,820
1,650
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