Question

Mary signed up and paid $660 for a 6 month ceramics course on June 1st with Choplet Ceramics. As of August 1st, Choplet’s accounting records would indicate:

Answer 1

Answer: $220 of revenue, $440 of deferred revenue

Step-by-step explanation:

Based on the information in the question, revenue will be recognised for the months of June and july which will be:

= 2/6 × $660

= $220

Deferred revenue will be:

= $660 - $220

= $440

Therefore, As of August 1st, Choplet’s accounting records would indicate $220 of revenue, $440 of deferred revenue.