Continuing Case Solution
Chapter 13
Part I
Memorandum
To: Eric Conner and Phil Martin, CM2
From: L. Harbach
Re: Unearned Revenue and Contingencies
Date: January 24, 2013
Here are the answers to your questions for the year ended December 31, 2013:
(a) The balance in the unearned revenue account should be equal to:
(b) Service Revenue 28,940
Unearned Revenue 28,940
The above journal entry is necessary to correct the unearned revenue liability
account. The balance sheet should report obligations for any commitments that
Continuing Case Solution
Part II
Memorandum
To: Eric Conner and Phil Martin, CM2
From: L. Harbach
Re: Unearned Revenue and Contingencies
Date: January 24, 2013
If CM2 is sued and wins its patent defense, the company would capitalize to the