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.
Answer the following statement true (T) or false (F)
True
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
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