XYZ Co sells 'white goods' - that is fridges, washing machines and similar household appliances. When customers buy the appliance, they are offered the opportunity to purchase an extended warranty contract that offers additional benefits over and above the standard warranty. The contracts run for one, two or three years. Receipts from the sale of the warranty contracts are credited to 'unearned service contract' revenues at the time of sale. As of December 31, 2019 the account balance was $480,000 before making a year-end adjustment. Throughout the year, as they are incurred, service contract costs are charged to the service contract expense account. At December 31, 2019, this account had a balance of $240,000. Outstanding service contracts at the end of the fiscal year expire as follows: During 2020 During 2021 During 2022 $100,000 $160,000 $70,000 What amount should be reported as unearned service contract revenues in the company's December 31, 2019 balance sheet?

Answer rating: 100% (QA)

The unearned service contract revenue to be reported in the December 31 2019 balance sheet of XYZ Co ... View the full answer