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The unearned revenue account of Jones Inc began 2011 with a normal balance of $4000 and...
The unearned revenue account of Jones Inc began 2011 with a normal balance of $4000 and ended 2011 with a normal balance of $18000. During 2011, the unearned revenue account was credited for $19000 that Jones Inc will earn later. Based on these facts, how much revenue did Jones Inc earn in 2011?
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Unearned revenue refers to payments for goods or services that are made to a company before their actual delivery to the buyer. The company is now obliged to fulfilled its commitment as per schedule.
At the beginning of 2011, Jones Inc. had a normal balance of $4000 in their unearned revenue account. During the year, the account was credited with $19000. At the end of the year, the normal balance in the account was $18000. An amount equal to the revenue actually earned is deducted from the account during the year.
If the revenue earned by Jones Inc. in 2011 was X, 4000 + 19000 - X = 18000
=> X = 4000 + 19000 - 18000 = 5000
The revenue earned by Jones Inc. in 2011 was $5000.
Posted by justaguide on September 15, 2013 at 4:22 AM (Answer #1)
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