Question

The comparative balance sheets of Titan Company for the years ended December 31, 2014 and 2015, reported the following amounts:

Balance Sheet:Liabilities: Unearned Rent Revenue, 2014: 11,000, 2015: 10,5002015 Income Statement Reported:Rent Revenue, 2014: 12,000

Calculate the total amount of rent collected during 2015.

Answer 1

$11,500

Step-by-step explanation:

The unearned revenue account is representative of the amount that has been collected in advance but is yet to be earned. It is a liability.

When cash is collected in advance,

Debit Cash account

Credit Unearned revenue

As the revenue is earned,

Debit Unearned revenue

Credit Revenue

Also, for the unearned revenue account

Opening balance + rent collected - revenue earned = closing balance

$11,000 + Rent collected - $12,000 = $10,500

Rent collected = $11,500