On October 31, the Vermillion Igloos Hockey Club received $672,000 in cash in advance for season tickets for eight home games. The transaction was recorded as a debit to Cash and a credit to Unearned Admissions. By December 31, the end of the fiscal year, the team had played three home games and received an additional $390,000 cash admissions income at the gate. a. Journalize the adjusting entry as of December 31. GENERAL JOURNAL PAGE POST. DATE DESCRIPTION DEBIT CREDIT REF. 20-- Adjusting Entries Dec. 31 b. List the title of the account and the related balance that will appear on the income statement. c. List the title of the account and the related balance that will appear on the balance sheet.

Revenue is the amount of services or the products which the company has actually earned or sold during the year. Revenue as per revenue recognition principle states that only that portion is taken into consideration from the advances received from the customer for which the services has been provided to that customer during the year. An adjusting journal entry at the end of the year is made to record the revenue actually received from the unearned revenue. The unearned revenue is the amount which the company has received in advance from the customers. Therefore, it is a liability until and unless company provides the services for which customer has given advance to the company.Given in the question: Advance from Customers = $672,000 Advance is for 8 home game tickets. By December 31, the team has played three home games only Company has received in additional $390,000 cash as admission income Computation of Admission Income from the unearned admission during the year Admission income from Unearned Admission = (Total unearned Admission / Total Games) * 3 Games Admission income from Unearned Admission = ($672,000 / 8) * 3 Admission income from Unearned Admission = $84,000 * 3 Admission income from Unearned Admission = $252,000 a) Adjusting Journal Entry Date Description Post Ref. Debit Credit 20-- Adjusting Entries Dec. 31 Unearned Admissions $252,000 To Admissions Income $252,000 b) Computation of balance that will appear on the income statement Admission Income = $252,000 + $390,000 Admissions Income = $642,000 C) Computation of balance that will appear on the balance sheet Unearned Admission = $672,000 - $252,000 Unearned Admissions = $420,000

Answered: On October 31, the Vermillion Igloos Hockey Club received $672,000 in cash in advance for season tickets for eight home games. The transaction was recorded as a…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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**Transcription for Educational Website:**

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On October 31, the Vermillion Igloos Hockey Club received $672,000 in cash in advance for season tickets for eight home games. The transaction was recorded as a debit to Cash and a credit to Unearned Admissions. By December 31, the end of the fiscal year, the team had played three home games and received an additional $390,000 cash admissions income at the gate.

a. **Journalize the adjusting entry as of December 31.**

**GENERAL JOURNAL**

| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT |
|-----------|-------------------|------------|-------|--------|
| 20-- | Adjusting Entries | | | |
| Dec. 31 | | | | |

b. **List the title of the account and the related balance that will appear on the income statement.**

| ACCOUNT TITLE | AMOUNT |
|---------------|--------|
| | $ |

c. **List the title of the account and the related balance that will appear on the balance sheet.**

| ACCOUNT TITLE | AMOUNT |
|---------------|--------|
| | $ |

---

**Explanation of Diagrams:**

1. **General Journal Table:**
- This table is meant for recording an adjusting journal entry as of December 31.
- There are columns for the date, description, post reference (usually for internal tracking), debit, and credit.

2. **Account Titles and Balances:**
- Two sections exist for listing account titles and corresponding balances.
- One section is for the income statement and the other for the balance sheet.

These diagrams are essential for understanding how financial transactions impact different financial statements and ensure accurate financial reporting.

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