question archive Capital, a business magazine, collected $480,000 in subscription revenue on May 31
Capital, a business magazine, collected $480,000 in subscription revenue on May 31
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Capital, a business magazine, collected $480,000 in subscription revenue on May 31. Capital earns a minimum of $351,000 from the buyers who are not the subscribers. Each subscriber will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the balance in the Unearned Revenue account on December 31?
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| Statement showing Computations | |
| Particulars | Amount |
| Amount collected in subscription revenue | 480,000.00 |
| Amount collected from buyers who are not subscribers | 351,000.00 |
| Subscription revenue = 480,000 - 351,000 | 129,000.00 |
| Time period from May 31 to Dec 31 | 7months |
| Revenue accrued till December 31 = 129,000*7/12 | 75,250.00 |
| balance in the Unearned Revenue account on December 31 = 129,000 - 75,250 | 53,750.00 |
