10) Brave Company sells appliance service contract, agreeing to repair appliances for two-year period. Brave's past...

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10) Brave Company sells appliance service contract, agreeing to repair appliances for two-year period. Brave's past experience is that, of the total pesos spent for repairs on service contracts, 40% is incurred evenly during the first contract year and 60% evenly during the second contract year. Receipts from service contract sales for the two years ended December 31, 2019, are as follows: 2018 2019 1,500,000 1,800,000 Receipts from contracts are credited to unearned service contract revenue. Assume that all contract sales are made evenly during the year. What amount should Brave report as service contract revenue at December 31, 2019? A. 1,080,000 C. 1,440,000 B. 1,110,000 D. 1,890,000 10) Brave Company sells appliance service contract, agreeing to repair appliances for two-year period. Brave's past experience is that, of the total pesos spent for repairs on service contracts, 40% is incurred evenly during the first contract year and 60% evenly during the second contract year. Receipts from service contract sales for the two years ended December 31, 2019, are as follows: 2018 2019 1,500,000 1,800,000 Receipts from contracts are credited to unearned service contract revenue. Assume that all contract sales are made evenly during the year. What amount should Brave report as service contract revenue at December 31, 2019? A. 1,080,000 C. 1,440,000 B. 1,110,000 D. 1,890,000

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Option A As per the principle of revenue recognition on accrual accounting re... View the full answer