chips-n-bits company sells service contracts for personal computers. The service contracts are for a one-year, two-year, or three-year period. All sales are for cash and all receipts are credited to unearned service contract revenues. This account had a balance of $144,000 at December 31,2007, before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of $36,000 at December 31,2007. Service contracts still outstanding at December 31,20027, expire as follows:
During 2008.......... $30,000
During 2009.......... 45,000
During 2010.......... 20,000
Question:
What amount should be reported as unearned service contract revenues in Chips-in Bits December 31,2007, balance sheet?
a. $49,000
b. $59,000
C. $95,000
d. $108,000
During 2008.......... $30,000
During 2009.......... 45,000
During 2010.......... 20,000
Question:
What amount should be reported as unearned service contract revenues in Chips-in Bits December 31,2007, balance sheet?
a. $49,000
b. $59,000
C. $95,000
d. $108,000