Question 5

Use the following information for the next four (4) questions: White Sox Company sells 3-year service contracts for air condition units for P1,500 each. Sales of service contracts and repairs made evenly throughout each year. The company estimates that 15% of repairs are done in the first year from the date of sale, 35% in the second year and 50% in the third year. Service contract sold are as follows:

2020 2021 2022

Number of service contracts sold 1,400 1,820 1,650

How much is the unearned revenue from service contracts as of December 31, 2021?

Question 6

How much revenue from the service contracts is recognized in 2021?

Question 7

How much revenue from service contract sold in 2021 is realized in 2022?

Question 8

How much is the unearned revenue from service contracts as of December 31, 2022?