Felton Co

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Felton Co. 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 contract revenues. This account had a balance of P480,000 at December 31, 2014 before year—end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of P120,000 at December 31, 2014. Outstanding service contracts at December 31, 2014 expire as follows:

During 2015 During 2016 During 2017 P100,000 P160,000 P70,000

What amount should be reported as unearned service contract revenues in Felton's December 31, 2014 statement of financial position?

P360,000.

P330,000.

P240,000.

P220,000.