True Tech Industries sells one year subscriptions to the Tri Net multi- use platform of Internet based games. True Tech sells 1,000 subscriptions for $60 each to customers on October 1, 2021. Payment is made by the customers at the time of sale (i.e. on October 1, 2021. ) determine whether the seller should recognize revenue over a period of time or at a point in time.

True Tech Industries sells one year subscriptions to the Tri Net multi- use platform of Internet based games. True Tech sells 1,000 subscriptions for $60 each to customers on October 1, 2021. Payment is made by the customers at the time of sale (i.e. on October 1, 2021. ) determine whether the seller should recognize revenue over a period of time or at a point in time.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Waterway Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $30 per year. During November 2020, Waterway sells 24,500 subscriptions beginning with the December issue. Waterway prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. 1. Prepare the entry in November for the receipt of the subscriptions. 2.Prepare the adjusting entry at December 31, 2020, to record sales revenue recognized in December 2020. 3.Prepare the adjusting entry at March 31, 2021, to record sales revenue recognized in the first quarter of 2021
Minarski sells computers and provides hardware maintenance services. On April 1st, Minarski sold a computer and a one-year unlimited maintenance as a bundle for $1,000. If sold separately, the computer costs $840 and the one- year unlimited maintenance service costs $360. How much revenue does Minarski Electronics recognize in April, assuming that revenue is accrued monthly? Please type your answer without the dollar symbol $800 should be typed as 800 $700.925 should be typed as 700.9 (retains one digit) $1,200 should be typed as 1,200
In December, Northern Kiteboarding magazine collected $80,000 for subscriptions for the next calendar year. The company collects cash in advance and then downloads the magazines to subscribers each month Apply the recognition criteria for revenues to determine (a) when the company should record revenue for this situation and (b) the amount of revenue the company should record for the January through March downloads a Northern Kiteboarding should record revenue after b. The amount of revenue equals nof when
For the following independent cases, in the space provided, calculate the amount of revenue that should be recorded in 2019 under the revenue recognition principle (point of sale). 1. Company A rents office space to tenants. On October 1, 2019 they collected $18,000 from a tenant which represents 12 month's rent paid in advance. 2. Company B sells heavy equipment. On December 1, 2019 a customer paid a $10,000 deposit towards the purchase of a $50,000 piece of equipment. The date. equipment was delivered on January 16, 2020 and the balance was paid 3. On December 29, 2019 Company C ships $15,000 worth of goods to a customer, F. O. B. destination. The goods arrive on January 3, 2020at the customer's office. The customer pays for the goods On February 1, 2020. 4. Company D provides legal services for clients. On December 2, 2019 a client hires the firm and pays a $10,000 advance payment. The firm did $4,q00 of service in 2019.
Your Personal Chef, Inc. prepares healthy gourmet dinners for clients on a subscription basis. Clients pay $75 per week for 3 delivered dinners. During 2019, Your Personal Chef, Inc. received advance payments of $18,000. At December 31, 2019, two-thirds of the advance payments had been earned. Make the entry for the advance payments received during the year. Make the necessary adjusting entry at December 31, 2019. What is the balance in the Unearned Revenue Account after the adjusting entry is made?
Mathura publishes a monthly sports magazine, Hockey Hits. Subscriptions to the magazine cost $22 per year. During November 2021, Mathura sells 18,000 subscriptions beginning with the December issue. Mathura prepares financial statements quarterly and recognizes revenue for magazines sold at the end of the quarter. The company uses the accounts Unearned Revenue and Revenue. Prepare the entry in November for the receipt of the subscriptions. Prepare the adjusting entry at December 31, 2021, to record revenue to be recognized in December 2021. Prepare the adjusting entry at March 31, 2022, to record revenue to be recognized in the first quarter of 2022
Blossom Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2022, Blossom sells 5,100 subscriptions for cash, beginning with the December issue. Blossom prepares financial 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. Prepare the entry in November for the receipt of the subscriptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Nov. enter an account title for the entry in November for the receipt of the subscriptions enter a debit amount enter a credit amount enter an account title for the entry in November for the receipt of the subscriptions enter a debit amount enter a credit amount…
On 1/4/2021, Europa Insurance Limited entered into an insurance contract with a customer who paid the annual premium of $300,000 on that date. State, to the nearest whole dollar, the amount Europa Insurance Ltd would report as a liability at 30 June 2021.
The following transactions occurred during December 31, 2021, for the Microchip Company. On October 1, 2021, Microchip lent $90,000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2022. On November 1, 2021, the company paid its landlord $6,000 representing rent for the months of November through January. Prepaid rent was debited. On August 1, 2021, collected $12,000 in advance rent from another company that is renting a portion of Microchip’s factory. The $12,000 represents one year’s rent and the entire amount was credited to deferred rent revenue. Depreciation on office equipment is $4,500 for the year. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $8,000. The company records vacation pay as salaries expense. Microchip began the year with $2,000 in its asset account, supplies. During the year, $6,500 in supplies were purchased and debited to supplies. At year-end, supplies costing…
3....new. //// Metlock Inc. was incorporated in 2019 to operate as a computer software service firm, with an accounting fiscal year ending August 31. Metlock’s primary product is a sophisticated online inventory-control system; its customers pay a fixed fee plus a usage charge for using the system.Metlock has leased a large, Alpha-3 computer system from the manufacturer. The lease calls for a monthly rental of $44,000 for the 144 months (12 years) of the lease term. The estimated useful life of the computer is 15 years.All rentals are payable on the first day of the month beginning with August 1, 2020, the date the computer was installed and the lease agreement was signed. The lease is non-cancelable for its 12-year term, and it is secured only by the manufacturer’s chattel lien on the Alpha-3 system.This lease is to be accounted for as a finance lease by Metlock, and it will be amortized by the straight-line method. Borrowed funds for this type of transaction would cost…
1. For each situation, indicate the date on which the company in question should recognize revenue under accrual-basis accounting: 1. On July 12th, Ramona Rice Company delivers a shipment of basmati rice to a customer, who pays in cash on July 15th. 2. Disney offers a discounted rate for Disney+ subscriptions to customers who pay for three years of service up front. Nana Duck pays for 3 years of Disney+ on June 6th 2022. Her subscription will expire on June 5th 2025. 3. Escape'r'Die is a high-stakes escape room located in Beverly Hills. A customer books the deluxe room experience "Sleeping with the Fishes" on November 1st. The customer comes to the escape room on November 17th and pays with a credit card before leaving, but the customer doesn't pay the bill to their credit card company until November 19th. On November 23rd, Escape'r'Die pays 50% of the funeral costs for one of the November 17th attendees.
the publisher of a popular magazine offers a special discounted price for 3-year subscription at the balance sheet date the amount that has already been collected but pertains to future periods is best referred to as : a- accrued subscription revenue (an asset account) b- deferred subscription revenue ( a liability account) c- earned subscription revenue ( a revenue account) d- pre-collected subscription receivable ( a deferred asset account)