Please help with the following question. Please show your work so I can understa
ID: 2431109 • Letter: P
Question
Please help with the following question. Please show your work so I can understand. Thank you.
On July 1, 2016, Alpha Company, a world famous international monthly food publication, sold 1,000 two-year subscriptions to their highly demanded monthly magazine. Each subscription sold for $15 each. Monthly magazines are mailed at the end of each month. Use this information to determine what amount should be reported on Alpha Company's December 31, 2016 balance sheet as a part of the Unearned Subscriptions Revenue related to the July 2016 sales.?
Explanation / Answer
On July 1, 2016 Alpha sold 1,000 two year subscriptions for $15 each. Total revenue for two years = 1,000 x 15 = $15,000
On December 31, 2016 Alpha should record Unearned Subscription revenue for 18 months (24 - 6 = 18 months).
So, the amount that should be reported on Alpha Company's December 31, 2016 balance sheet as a part of the Unearned Subscriptions Revenue related to the July 2016 sales
= (15,000 / 24) x 18 = $11,250