Ask Question
BusinessBusiness
20 October, 03:17

sells subscriptions for $ 120 for 30 issues. The company collects cash in advance and then mails out the magazines to subscribers each month. Apply the revenue recognition principle to determine a. when Boston Magazine should record revenue for this situation. b. the amount of revenue Boston Magazine should record for seven issues. a. Boston Magazine should record revenue when ▼ the subscribers. b. Boston Magazine should record $ 28 for seven issues.

+5
Answers (1)
  1. 20 October, 05:45
    0
    Boston Magazine should record revenue when the magazines are delivered to the subscribers

    Boston Magazine should record $28 for seven issues

    Explanation:

    Revenue should recognized when earned and not when it is received. It is earned when the seller fulfills his obligation by delivering the promised good or service to the buyer.

    Hence, the revenue received in advance should be credited to revenue received in advance account until it is earned

    The cost per issue of magazine is $4 ($120/30), so as a result, seven issues would be $28 ($4*7)

    The double to record the seven issues is as follows:

    Dr Revenue in advance $28

    Cr Revenue $28

    Henceforth, the value of magazines delivered each is debited to revenue in advance and credited to revenue to show the amount of revenue earned each month
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “sells subscriptions for $ 120 for 30 issues. The company collects cash in advance and then mails out the magazines to subscribers each ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Heather is the copy editor for the newspaper. She has to read everything before it goes to print because it has to be perfect. She sets rigid deadlines to make sure she has enough time to correct everyone's mistakes.
Answers (1)
Salvia Company recently purchased a truck. The price negotiated with the dealer was $40,000. Salvia also paid sales tax of $2,000 on the purchase, shipping and preparation costs of $3,000, and insurance for the first year of operation of $4,000.
Answers (1)
In the treaty of Kanazawa, Japan aggred to
Answers (1)
If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?
Answers (1)
Which of the following is a distance-based method for location alternatives evaluation? Factor rating methodDecision treeBreak-even approachTransportation methodCenter of gravity approach
Answers (2)
New Questions in Business
Evan Company reports net income of $140,000 each year and declares an annual cash dividend of $50,000. The company holds net assets of $1,200,000 on January 1, 2017.
Answers (1)
Those who believe that regulations on business and industry are too numerous and too complex are most likely to favor the policy of
Answers (1)
In phenomenological studies, researchers strive to ensure that their own preconceived beliefs and opinions do not influence the emerging data, using which strategy? a. Constant comparison. b. Participant observation. c. Hermeneutics. d. Bracketing.
Answers (1)
A survey by the National Restaurant Association found that 70% of consumers say that they are more likely to visit restaurants that offer locally produced food.
Answers (1)
Which of the following is not a quality of a good employee? a. hardworking b. dishonest c. polite d. punctual
Answers (2)
Home » Business » sells subscriptions for $ 120 for 30 issues. The company collects cash in advance and then mails out the magazines to subscribers each month. Apply the revenue recognition principle to determine a.
Sign Up Forgot Password?