Use the same facts for Vodafone as in item 1. Further, assume Vodafone reported unearned service…

(Learning Objective 1, 3: Linking deferrals and cash flows) This exercise builds from a simple situation to a slightly more complex situation. Vodafone, the British wireless phone service provider, collects cash in advance from customers. All amounts are in millions of pounds sterling, (£) the British monetary unit. Assume Vodafone collected £500 in advance during 2008 and at year end still owed customers phone service worth £100.

Required

1. Show what Vodafone will report for 2008 on its Income statement • Balance sheet

2. Use the same facts for Vodafone as in item 1. Further, assume Vodafone reported unearned service revenue of £70 back at the end of 2007. Show what Vodafone will report for 2008 on the same financial statements. Explain why your answer here differs from your answer to item 1.

"Is this question part of your assignment? We can help"

ORDER NOW