Denny co, unearned revenues | Accounting homework help

Denny Co. 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 $900,000 at December 31, 2011 before year-end adjustment.  

Service contracts still 

outstanding at December 31, 2011 expire as follows:




 During 2012  During 2013  During 2014

 $190,000  285,000  125,000

What amount should be reported as Unearned Service Revenues in Denny’s December 31, 2011 balance sheet?

a) $900,000 b) $600,000 c) $1,500,000 d) $300,000

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