300,000 dollars will be reported on December 31, 2021 balance sheet as unearned revenue if coaster trucks make appropriate adjusting entry.
The company performed services but they were not recorded. Those services were for 2021 and thus will be counted in 2021's income statement, which is 1,425,790 + 165,000
= $1,590,790
The coaster trucks received $300,000 even though they have not yet provided the services for it, therefore the unearned revenue will be $300,000.
Unearned revenue is money that has been received by a person or business for a service or good that hasn't yet been rendered or supplied. It can be viewed as a "prepayment" for products or services that an individual or business expects to provide to the buyer at a later time.
An account in financial accounting is unearned revenue. It is regarded as a liability, or a sum that the company owes. On a company's balance sheet, a standard accounting financial statement, it is classified as a current liability.
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Question- On the last day of December 2021, Coaster Trucks entered into a transaction that resulted in a receipt of $300,000 cash in advance related to services that will be provided during January 2022. During December of 2021, the company also performed $165,000 of services which were neither billed nor paid. Prior to December adjustments and before these two transactions were recorded, the company's trial balance showed service revenue of $1,425,790 at December 31, 2021. There are no other prepaid services yet to be delivered, and during the month all outstanding accounts receivable from prior months were collected. If Coaster Trucks makes the appropriate adjusting entry, how much will be reported on the December 31, 2021 balance sheet as accounts receivable?
