Question

Rooms for Less is a bed and breakfast situated on Great Slave Lake, that closes each year on September 10. For the last two weeks of operation, they had taken 55 reservations. For each reservation, they collected a deposit of $100. For the period from August 26 to August 31, 25 guests stayed at the B&B and paid a total of $8,350. What is the amount of unearned revenue Rooms for Less would have on September 1?

A :

$8,350

B :

$3,000

C :

$5,350

D :

$5,500

Answer 1

Correct answer----(B) $3,000

Number of reservations	55
Collection per reservation	$            100.00
Total deposit from customers	$        5,500.00
Reservations Completed	25
Revenue earned on completed reservations (25*100)	$        2,500.00
Unearned portion	$        3,000.00