Question

The city of Ruth has been awarded a $1,000,000 federal expenditure-driven grant to improve bike trails. The federal government advanced the city $600,000 when the grant was awarded on January 10, 20X8. The city incurred $418,000 of qualifying expenditures during 20X8. How much should the city of Ruth recognize as deferred revenue for its fiscal year ending December 31, 20X8?

Answer 1

The answer is: Deferred revenue is $182,000

Step-by-step explanation:

The city received $600,000 and incurred in $418,000 of qualifying expenditures. So the deferred revenue is:

• Deferred revenue = $600,000 - $418,000 = $182,000

Deferred revenue is a liability that results from unearned revenue that a company received, but has not delivered yet (either goods or services).