Moreno Company publishes a monthly sports magazine, Fishing Preview . Subscripti
ID: 2531197 • Letter: M
Question
Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $25 per year. During November 2017, Moreno sells 32,000 subscriptions beginning with the December issue. Moreno 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.
Date
Account Titles and Explanation
Debit
Credit
Nov. 30
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Date
Account Titles and Explanation
Debit
Credit
Mar. 31
Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $25 per year. During November 2017, Moreno sells 32,000 subscriptions beginning with the December issue. Moreno 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.
Explanation / Answer
Nov-30 Cash (32,000*$25) $ 800,000 Unearned revenue $ 800,000 Dec-31 Unearned revenue ($800,000/12*1 month) $ 66,667 Sales revenue $ 66,667 Mar-31 Unearned revenue ($800,000/12*3 month) $ 200,000 Sales revenue $ 200,000
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