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

answer; i believe that the correct answer is ( owners investment)

Answer from: Quest

explanation:

Another question on Business

Business, 21.06.2019 20:30

Which organization was established to train the hard-core unemployed? - better business bureau- equal employment opportunity commission- environmental protection agency- affirmative action committee- national alliance of business

Answers: 1

Answer

Business, 22.06.2019 06:20

About time delivery co. incurred the following costs related to trucks and vans used in operating its delivery service: classify each of the costs as a capital expenditure or a revenue expenditure. 1. changed the oil and greased the joints of all the trucks and vans. 2. changed the radiator fluid on a truck that had been in service for the past four years. 3. installed a hydraulic lift to a van. 4. installed security systems on four of the newer trucks. 5. overhaul the engine on one of the trucks purchased three years ago. 6. rebuilt the transmission on one of the vans that had been driven 40,000 miles. the van was no longer under warranty. 7. removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication. 8. repaired a flat tire on one of the vans. 9. replaced a truck's suspension system with a new suspension system that allows for the delivery of heavier loads. 10. tinted the back and side windows of one of the vans to discourage theft of contents.

Answers: 1

Answer

Business, 22.06.2019 20:10

With signals from no-claim bonuses and deductibles, a. the marginal cost curve for careful drivers lies to the left of the marginal cost curve for aggressive drivers b. auto insurance companies insure more aggressive drivers than careful drivers because aggressive drivers have a greater need for the insurance c. the market for car insurance has a separating equilibrium, and the market is efficient d. most drivers pay higher premiums than if the market had no signals

Answers: 1

Answer

Business, 22.06.2019 20:50

Which of the following statements regarding the southern economy at the end of the nineteenth century is accurate? the south was producing as much cotton as it had before the civil war.

Answers: 3

Answer

You know the right answer?

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

Questions