Decker Company assigns some of its patents to other enterprises under a variety of licensing agreements. In some instances advance royalties are received when the agreements are signed, and in others, royalties are remitted within 60 days after each license year-end. The following data are included in Decker’s December 31 balance sheet:
Year 1 Year 2
Royalties receivable $90,000 $85,000
Unearned royalties 60,000 40,000
During year 2 Decker received royalty remittances of $200,000. In its income statement for the year ended December 31, year 2, Decker should report royalty revenue of
$195,000
$215,000
$220,000
$225,000
The answer is b: 215,000 of earned royalty revenue. the equation is 195,000 + 20,000…….not sure where the 195,000 came from.
Can someone explain???
It begins with a 75
Been here too long as a cheerleader....ready to pass
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