Business, 06.05.2020 00:14 bryce99

The Tennis Times (TTT) is a publisher of magazines. Its accounting policy for subscriptions follows:RevenuesRevenues from our magazine subscription services are deferred initially and later recognized as revenue as subscription services are provided. Assume TTTa) collected $420 million in 2018 for magazines that will be distributed later in 2018 and 2019,b) provided $204 million of services on these subscriptions in 2018, andc) provided $216 million of services on these subscriptions in 2019.Required:1) Using the information given, indicate the accounts, amounts, and accounting equation effects of transactions (a), (b), and (c).2) Using the information given, prepare the journal entries that would be recorded for a) , b) and c).

Answers: 1

Show answers

Answers

Answer from: jacamron

The Tennis Times:

1) Accounts, amounts, and accounting equation effects of transactions:

a) Cash Account and Deferred Subscription Revenue Account will be debited and credited with the sum of $420 million respectively.

The accounting equation is Assets (Cash) will be increased and Liabilities (Deferred Subscription Revenue) increased by $420 million respectively.

b) Deferred Subscription Revenue Account and Subscription Revenue Account will be debited and credited with the sum of $204 million in 2018 respectively.

The accounting equation is Retained Earnings will increase and Liabilities (Deferred Subscription Revenue) will decrease by $204 million respectively.

c) Deferred Subscription Revenue Account and Subscription Revenue Account will be debited and credited with the sum of $216 million in 2019 respectively.

The accounting equation is Retained Earnings will increase and Liabilities (Deferred Subscription Revenue) will decrease by $216 million respectively.

2) Journal Entries:

2018:

a) Debit Cash with $420 million

Credit Deferred Subscription Revenue with $420 million

To record the collection of subscription for 2018 and 2019.

b) Debit Deferred Subscription Revenue Account with $204 million

Credit Subscription Revenue Account with $204 million

To recognize subscription for 2018

c) Debit Deferred Subscription Revenue Account with $216 million

Credit Subscription Revenue Account with $216 million

To recognize subscription for 2019

Explanation:

a) When revenue is collected, it should be recognized in the financial statement (Income Statement) based on the matching principle and accrual concepts.

The matching principle states that revenue for a period should match the expenses or costs incurred for earning the revenue. And the accrual concepts states that revenue and costs should be recognized whether cash was received or not.

The implication is that when though revenue was collected for 2018 and 2019, only the revenue for 2018 should be recognized in the financial statement of 2018. The other part for 2019 should be deferred till 2019 when it would be recognized.

Answer from: Quest

Ireally would like to but idk

Answer from: Quest

The answer would be false.

Other questions on the subject: Business

Business, 21.06.2019 21:30, meababy2009ow9ewa

1. gar principles or "the principles"are intended to do what? a. foster an awareness of the hierarchical structure of the organization b. explain the best method of implementing biometric security techniques c. foster an awareness of the importance of good employee training d. foster an awareness of getting upper level management on board in understanding the need to implement an ig program e. foster an awareness of good record keeping principles

Answers: 1

continue

Business, 22.06.2019 01:00, biggs113056

Awidower devised his fee simple interest in his residence as follows: “to my daughter for life, then to my oldest grandchild who survives her.” at the time of the widower’s death, he was survived by his only two children, a son and a daughter, and by one grandchild, his daughter’s son. a short time later, the daughter together with her son entered into a contract to sell the residence in fee simple to a buyer. the applicable jurisdiction continues to follow the common law rule against perpetuities, but has abrogated the rule in shelley’s case. at the closing, the buyer refused to purchase the residence. can the sellers compel the buyer to do so?

Answers: 2

continue

Business, 22.06.2019 04:30, csteward2917

Your take on decision making process

Answers: 1

continue

Business, 22.06.2019 16:00, anonymous1813

Winners of the georgia lotto drawing are given the choice of receiving the winning amount divided equally over 2121 years or as a lump-sum cash option amount. the cash option amount is determined by discounting the annual winning payment at 88% over 2121 years. this week the lottery is worth $1616 million to a single winner. what would the cash option payout be?

Answers: 3

continue

You know the right answer?

The Tennis Times (TTT) is a publisher of magazines. Its accounting policy for subscriptions follows:...