KNICKS Company sells portable DVD players for P12,000 each and offers to each customer a 3-year service contract for an additional P4,800.  During 2021, the company sold 800 DVD players and 500 service contracts for cash.  Expenses related to the service contracts for 2021 amounted to P350,000.

Past records of the company indicate that the pattern of repairs has been 50% in the year after the sale, 30% in the second year, and 20% in the third year. Sales of the contracts were made evenly during the year

The liability balance to be reported in the 2021 statement of financial position is?
 

2. HEAT Company sells subscriptions to a semi-annual magazine that is delivered to customers at the end of June 30 and December 31. Subscriptions are P450 for one year and are received as follows for the months of October 2,000; November 3,000; and December 4,500

 
The liability balance to be reported in the 2021 statement of financial position is?

Answer rating: 100% (QA)

1 KNICKS Company To determine the liability balance for service contracts we need to calculate the p... View the full answer