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Supplies Expense (Back-In Method)
Beginning Supplies + Purchases - Ending Supplies
Deferral Adjustment (Monthly Expense)
Total Prepaid Amount / Total Months
Unearned Revenue Recognition
(Total Retainer / Total Contract Months) x Months Elapsed
Amount of Revenue Recognized
Monthly revenue rate x number of months elapsed.
Total Revenue of Year 1
Calculated by multiplying the monthly revenue rate by the number of months in the contract falling within Year 1.
Adjusting Entry
Cash / number of months (12?)