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?
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.