Question

XYZ Company began operations in 2019 and entered into the following transactions during the year: February 15: Sold common stock to owners for $372,000 cash. May 22: Purchased inventory costing $52,000 on account. June 1: Received $78,810 cash from a customer for services to be performed over the next ten months. August 19: Sold 74 the inventory purchased on May 22 for $112,000. The customer paid % of the bill on August 19 and agreed to pay the other % at a future point in time. December 31: Recorded all necessary adjusting entries. Calculate the amount of unearned revenue reported in XYZ Company's December 31, 2019 balance sheet.

Answer 1

Date	Accounts Name and Explanation	Debit	Credit
Feb-15	Cash	372,000
	Common Stock		372,000
	(To record common stock issue)
May-22	Inventory	52,000
	Accounts Payable		52,000
	(To record inventory purchase)
Jun-01	Cash	78,810
	Unearned revenue		78,810
	(To record unearned revenue)
Aug-19	Cash	56,000
	Accounts Receivable	56,000
	Sales Revenue		112,000
	(To reocrd sales revenue)
Aug-19	Cost of goods sold	93,000
	Inventory		93,000
	(To record cost of goods sold)
Dec-31	Unearned Revenue	70,929		(78810/10 months * 9 months)
	Sales Revenue		70,929	(78810/10 months * 9 months)
	(To record adusting entry)