Vivid-View Theater sells books of theater tickets to its customers at $28 per bo

Question

Vivid-View Theater sells books of theater tickets to its customers at $28 per book. Each book contains a certain number of tickets to future shows. During the current period, 1,000 books were sold for $28,000 cash and this amount was credited to Unearned Ticket Revenue. At the end of the period, the accountant for Vivid-View determined that $16,800 worth of tickets had been turned in at the box office. The appropriate adjusting entry at the end of the accounting period would be a. Debit Ticket Revenue $11,200 and credit Unearned Ticket Revenue $11,200 b. Debit Ticket Revenue $11,200 and credit Cash $11,200 c. Debit Unearned Ticket Revenue $16,800 and credit Ticket Revenue $16,800 d. Debit Unearned Ticket Revenue $16,800 and credit Ticket Books on Hand $16, 800 e. None of the above

Explanation / Answer

c. Debit Unearned Ticket Revenue $16,800 and credit Ticket Revenue $16,800. Since $16,800 were turned in, that means $16,800 was earned. $16,800 credit to ticket revenue would increase revenue, and $16,800 debit to unearned ticket revenue would decrease the unearned revenue.

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