4. Cobb Company sells appliance service contracts ageing to repair appliances for two-year period. The past experience is that, of the total amount spent for repairs on service contracts, 40% is incurred evenly during the first contract year and 60% is incurred evenly during the second contract year. Receipts from service contract sales are P500,000 for 2015 and P600,000 for 2016. Receipts from contracts are credited to unearned service revenue. All sales are made evenly during the year.

What amount should be reported as unearned service revenue on December 31, 2016?

A. 360,000

B. 470,000

C. 480,000

D. 630,000

5. Kent Company sells magazine subscriptions of one to three-year periods. Cash receipts from subscribers are credited to magazine subscriptions collected in advance and this account had a balance of P2,400,000 on December 31, 2015 before year-end adjustment. Outstanding subscriptions. on December 31, 2015 expire as follows:

During 2016 600,000

During 2017 900,000

During 2018 400,000

What amount should be reported as magazine subscriptions collected in advance on December 31, 2015?

A. 500,000

B. 1,200,000

C. 1,900,000

D. 2,400,000

6. In November and December 2015, Dorr Company, a newly organized magazine publisher, received P720,000 for 1,000 three-year subscriptions at P240 per year, starting with the January 2016 issue. The entity elected to include the entire P720,000 in the 2015 income tax return.

What amount should be reported as subscription revenue in the income statement for 2015?

A. 720,000

B. 360,000

C. 240,000

D. 0