Rathbone Corp

Multiple Choice

Rathbone Corp.sells major household appliance service contracts for cash.The service contracts are for a one-year, two-year, or three-year period.Cash receipts from contracts are credited to Unearned Service Revenues.This account had a balance of $1,100,000 at December 31, 2017 before year-end adjustment.Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $325,000 at December 31, 2017.
Service contracts still outstanding at December 31, 2017 expire as follows:
What amount should be reported as Unearned Service Revenues on Rathbone's December 31, 2017 statement of financial position?

A) $774,000
B) $325,000
C) $449,000
D) $124,000