Acct 2210 Zeigler: E2-12A – pg 100 (Unearned Revenue and end of period adjusting entry)
a. “Unearned Revenue” is a liability account (we have not earned anything initially)
Ed Arnold Personal Financial Planning
Horizontal Statements Model for 2013
Assets
Event
Cash
1. Advance Payment 120,000
2. Revenue Earned
NA
Totals
120,000
= Liabilities
Unearned
= Revenue
= 120,000
= (80,000)*
=
40,000
+ Stk. Equity
Retained
+ Earnings
+
NA
+
80,000
+
80,000
Income Statement
Rev.
NA
80,000
80,000




Exp.
NA
NA
-0-
=
=
=
=
Net
Income
NA
80,000
80,000
Statement
of
Cash Flows
120,000
OA
NA
120,000 Net Chg
*$120,000 x 8/12 = $80,000
b. Revenue that will be recognized in 2014 is $40,000, the remainder of the unearned revenue.
c. $-0-, no cash is received in 2014. All cash was received in 2013.