Question

Mary signed up and paid $1,260 for a 6 month ceramics course on June 1st with Choplet Ceramics. As of August 1st, Choplet’s accounting records would indicate ___________.

Answer 1

Answer:

Answer:

$420 of revenue, $840 of deferred revenue

Explanation:

Data provided in the question

Paid amount = $1,260

Given months = 6 months

Number of months = 2 months

For two months, the revenue is

= Paid amount × number of months ÷ given months

= $1,260 × 2 months ÷ 6 months

= $420

Now the deferred revenue is

= Paid amount - revenue

= $1,260 - $420

= $840

Hence, the revenue is $420 and the deferred revenue is $840