Jones Company requires prepayment from all customers.Jones Company reported revenue of $258,000 on its Year 1 income statement.The balance in its Unearned Revenue account was $12,000 at the start of Year 1 and $4,000 at the end of the year.Based on this information alone,the amount of cash that Jones collected from customers for Year 1 was $250,000.

Question

Quizplus · Accepted Answer

Ending balance of unearned revenue of $4,000 = Beginning balance of unearned revenue of $12,000 + Increase due to cash collected in advance (the unknown)- Decrease due to services provided to customers of $258,000
Cash collected in advance from customers = $4,000 - $12,000 + $258,000 = $250,000

Jones Company Requires Prepayment from All Customers