Direct, the British wireless phone service provider collects cash in advance from customers. All amounts are in millions of pounds sterling (£), the British monetary unit. Assume Direct collected 400 in advance during 2010 and at year end still owed customers phone service worth 105.

Requirements
1. Show what Direct will report for 2010 on its income statement balance sheet.
2. Use the same facts for Direct as in Requirement 1. Further, assume Direct reported unearned service revenue of 95 back at the end of 2009. Show what Direct will report for 2010 on the same financial statements. Explain why your answer here differs from your answer to Requirement 1.