Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 3, Problem 3YT
To determine
Identify the amount of revenue that would be recognized for the fiscal year ended December 31, 2010 and describe the revenue recognition for the given situation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
January 2011 issue. Lane included the entire $90,000 in its 2010 income statement. What
In November and December 2010, Lane Co., a newly organized magazine publisher,
received $90,000 for 1,000 three-year subscriptions at $30 per year, starting with the
8.
amount should Lane report in its 2010 income statement for subscriptions revenue?
Answer
A newspaper sells annual subscriptions and recognizes subscription revenue evenly
throughout the year. On January 1 of the current year, the newspaper collected $9,382,648.
How much do net assets change each month in the current year as a result of recognizing
revenue related to the subscriptions?
Provide your answer to the nearest whole dollar (i.e., no decimals).
Lake View Magazine sells subscriptions for $72 for 18 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 Lake View Magazine should record revenue for this situation.
b. the amount of revenue Lake View Magazine should record for eight issues.
a. Lake View Magazine should record revenue when
b. For eight issues, Lake View Magazine should record revenue of
the subscribers.
Chapter 3 Solutions
Financial Accounting
Ch. 3 - Prob. 1YTCh. 3 - Prob. 2YTCh. 3 - Prob. 3YTCh. 3 - Prob. 4YTCh. 3 - Prob. 5YTCh. 3 - Prob. 6YTCh. 3 - Prob. 7YTCh. 3 - How does accrual basis accounting differ from cash...Ch. 3 - Prob. 2QCh. 3 - Prob. 3Q
Ch. 3 - Prob. 4QCh. 3 - What are accrued expenses?Ch. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Name two common deferred expenses.Ch. 3 - What does it mean to recognize revenue?Ch. 3 - How does matching relate to accruals and...Ch. 3 - What is depreciation?Ch. 3 - Why is depreciation necessary?Ch. 3 - Prob. 13QCh. 3 - Prob. 14QCh. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - When prepaid insurance has been used, the...Ch. 3 - Prob. 10MCQCh. 3 - Prob. 1SEACh. 3 - Prob. 2SEACh. 3 - Account for interest expense. (LO 1, 2). UMC...Ch. 3 - Prob. 4SEACh. 3 - Account for insurance expense. (LO 1, 3). Catrina...Ch. 3 - Prob. 6SEACh. 3 - Account for unearned revenue. (LO 1, 3). Able...Ch. 3 - Prob. 8SEACh. 3 - Prob. 9SEACh. 3 - Prob. 10SEACh. 3 - Calculate profit margin on sales ratio. (LO 5)....Ch. 3 - Prob. 12SEBCh. 3 - Prob. 13SEBCh. 3 - Prob. 14SEBCh. 3 - Prob. 15SEBCh. 3 - Prob. 16SEBCh. 3 - Prob. 17SEBCh. 3 - Prob. 18SEBCh. 3 - Prob. 19SEBCh. 3 - Calculate net income. (LO I, 4). Suppose a company...Ch. 3 - Prob. 21SEBCh. 3 - Prob. 22SEBCh. 3 - Prob. 23EACh. 3 - Prob. 24EACh. 3 - Prob. 25EACh. 3 - Prob. 26EACh. 3 - Prob. 27EACh. 3 - Prob. 28EACh. 3 - Account for insurance expense. (LO 1, 3). Yodel ...Ch. 3 - Prob. 30EACh. 3 - Prob. 31EACh. 3 - Prob. 32EACh. 3 - Prob. 33EACh. 3 - Prob. 34EACh. 3 - Southeast Pest Control, Inc., was started when its...Ch. 3 - Prob. 36EACh. 3 - Prob. 37EACh. 3 - Prob. 38EACh. 3 - Prob. 39EACh. 3 - Prob. 40EBCh. 3 - Prob. 41EBCh. 3 - Prob. 42EBCh. 3 - TJs Tavern paid 10,800 on February 1, 2010, for a...Ch. 3 - Prob. 44EBCh. 3 - Prob. 45EBCh. 3 - Account for insurance expense. (LO 1, 3). All...Ch. 3 - Prob. 47EBCh. 3 - Prob. 48EBCh. 3 - Prob. 49EBCh. 3 - Prob. 50EBCh. 3 - Prob. 51EBCh. 3 - Prob. 52EBCh. 3 - From the following list of accounts (1) identify...Ch. 3 - Prob. 54EBCh. 3 - Prob. 55EBCh. 3 - Prob. 56EBCh. 3 - Prob. 57PACh. 3 - Prob. 58PACh. 3 - Prob. 59PACh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 61PACh. 3 - Record adjustments. (LO 1, 2, 3). The Gladiator...Ch. 3 - Prob. 63PACh. 3 - Transactions for Pops Company for 2011 were as...Ch. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 66PACh. 3 - Prob. 67PACh. 3 - Record adjustments and prepare income statement....Ch. 3 - Prob. 69PBCh. 3 - Prob. 70PBCh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 72PBCh. 3 - Record adjustments. (LO 1, 2, 3). Summit Climbing...Ch. 3 - Prob. 74PBCh. 3 - Prob. 75PBCh. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 77PBCh. 3 - Prob. 78PBCh. 3 - Identify and explain accruals and deferrals. (LO...Ch. 3 - Prob. 2FSACh. 3 - Prob. 3FSACh. 3 - Prob. 1CTPCh. 3 - Prob. 1IECh. 3 - Prob. 3IECh. 3 - Prob. 4IE
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Torres Corp. estimates its sales returns at the end of each month. On December 1, 2022, Torres Corp.’s “Sales Return Liability” account had a normal balance of $10,000. During December, the company had customer sales totaling $600,000 and actual returns of $12,000. At the end of December, Torres estimates sales returns related to December’s sales will be $8,000. Question: What should be the “Sales Return Liability” account balance on 12/31/22 after all entries have been made? $10,000 $8,000 $6,000 $18,000 $4,000arrow_forwardApplying the revenue recognition principle Seacoast Magazine sells subscriptions for $36 for 18 issues. The company collects cash in advance and then mails out the magazines to subscribers each month. Apply the revenue recognition principle to determine When Seacoast Magazine should record revenue for this situation. The amount of revenue Seacoast Magazine should record for eight issues.arrow_forwardRapoo Inc. sells gift certificates. One-half of the gift certificates outstanding on January 1 unredeemed as of yearend expired during the year. The Unearned Revenue from Gift Certificates account increased to P210,000 at yearend. The gross profit rate based on cost is 25%. Information on gift certificates is shown below: How much of the gift certificates sold during the year was redeemed? How much is the net income for the year arising from the gift certificates?arrow_forward
- On January 1, Fashion Magazine received $16,440 from subscribers for the annual subscriptions that it recorded in Unearned Revenue. The issues of the magazine are sent digitally to subscribers monthly. What amount of subscription revenue should the magazine recognize on January 31 when the first issue is sent? Multiple Choice O $16,440. $1,370. $8,220. $4,110. $0.arrow_forwardFor 2014, Kasay Company initiated a sales promotion campaign that included the expenditure of an additional $30,000 for advertising. At the end of the year, Scott Brown, the president, is presented with the following condensed comparative income statement: Instructions1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to net sales for each of the years. Round to one decimal place.2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in(1).arrow_forwardHow much sales revenue and net income would you expect PolicePrep to have in the next fiscal year (i.e., 12 months from July, 2003 to June, 2004; see Exhibit 5 on pg. 15). Please explain how you arrived at your answer. Note that Exhibit 5 covers 1 year, with the first column reporting 6 months data from July-Dec 02’ and the next two columns reporting data on the quarterly basis for Jan-Mar 03’ and Apr-Jun 03’)? If you don’t know what EBITDA stands for, please see: http://en.wikipedia.org/wiki/Earnings_before_interest,_taxes,_depreciation_and_amortizationarrow_forward
- The following facts relate to gift cards sold by Sunbru Coffee Company during 2018. Sunbru’s fiscal year ends on December 31. (a.) In October 2018, sold $3,100 of gift cards, and redeemed $510 of those gift cards. (b.) In November 2018, sold $4,100 of gift cards, and redeemed $1,410 of October gift cards and $710 of November gift cards. (c.) In December 2018, sold $3,100 of gift cards, and redeemed $210 of October gift cards, $2,100 of November gift cards, and $410 of December gift cards. (d.) Sunbru views a gift card to be “broken” (with a remote probability of redemption) two months after the end of the month in which it is sold. Thus, an unredeemed gift card sold at any time during July would be viewed as broken as of September 30. Required:1. Prepare all journal entries appropriate to be recorded only during the month of December 2018 relevant to gift card sales, gift card redemptions, and gift card breakage.2. Determine the balance of the deferred revenue liability to be…arrow_forwardE10-7 Valenti Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2014, Valenti sells 6,300 subscriptions for cash, beginning with the December issue. Valenti prepares finan- cial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end. ed ие. Instructions (a) Prepare the entry in November for the receipt of the subscriptions. (b) Prepare the adjusting entry at December 31, 2014, to record subscription revenue in December 2014. (c) Prepare the adjusting entry at March 31, 2015, to record subscription revenue in the first quarter of 2015.arrow_forwardOlaf Inc. sells home improvement magazine subscriptions to customers. On September 30, 2020, the company sold 13,500 annual subscriptions for $16 each. Assume that the home improvement magazines are published and delivered on a monthly basis. Determine the entry on December 31, 2020.arrow_forward
- Applying the revenue recognition principle Seacoast Magazine sells subscriptions for $36 for 18 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 Seacoast Magazine should record revenue for this situation. b. the amount of revenue Seacoast Magazine should record for eight issues.arrow_forwardDuring August, 2020, Sheffield’s Supply Store generated net sales of $60100. The company’s expenses were as follows: cost of goods sold of $35000 and operating expenses of $4500. The company also had rent revenue of $1000 and a loss on the sale of a delivery truck of $1700. Sheffield’s operating income for the month of August 2020 is $20600.$21600.$19900.$25100.arrow_forwardDuring 2021, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns of $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all sales will be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns, assuming that all sales are made on credit and all accounts receivable are outstanding. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education