Question

At December 31, the unadjusted trial balance of R&M Entertainment reports Unearned Revenue of $3,001 and Service Revenues of $33,944. 53% of the unearned revenue has been earned as of December 31. When R&M prepares the adjusting entry on December 31, what is the amount that will be reported as a liability on the balance sheet as of December 31?\

Answer 1

$1410.47

Step-by-step explanation:

Unearned revenue is the revenue upon which cash has been received by the entity prior to the entity discharging its responsibility of providing services in respect of the payment,hence it is a liability until it is finally earned and recorded as revenue.

The balance of the unearned revenue is the liability that R&M must report in its balance sheet as of December 31.

Balance of unearned revenue=$3,001-($3,001*53%)

balance of unearned revenue=$3,001-$1590.53 =$1410.47