SuMan Magazine Publishing Company sells magazine subscriptions on an annual basi
ID: 2822400 • Letter: S
Question
SuMan Magazine Publishing Company sells magazine subscriptions on an annual basis covering 12 issues. Subscriptions totaling $36,000 were collected on June 1, 2012 and the total amount collected was recorded in a temporary account. The monthly magazines were delivered in June through December. The required adjusting entry at December 31, 2012 would include: a debit to Unearned Magazine Revenues. a credit to Magazine Revenues. a debit to Accounts Receivable. a debit to Magazine Revenues. none of the above. SuMan Magazine Publishing Company sells magazine subscriptions on an annual basis covering 12 issues. Subscriptions totaling $36,000 were collected on June 1, 2012 and the total amount collected was recorded in a temporary account. The monthly magazines were delivered in June through December. The required adjusting entry at December 31, 2012 would include: a debit to Unearned Magazine Revenues. a credit to Magazine Revenues. a debit to Accounts Receivable. a debit to Magazine Revenues. none of the above. SuMan Magazine Publishing Company sells magazine subscriptions on an annual basis covering 12 issues. Subscriptions totaling $36,000 were collected on June 1, 2012 and the total amount collected was recorded in a temporary account. The monthly magazines were delivered in June through December. The required adjusting entry at December 31, 2012 would include: a debit to Unearned Magazine Revenues. a credit to Magazine Revenues. a debit to Accounts Receivable. a debit to Magazine Revenues. none of the above.Explanation / Answer
ANSWER TO THIS QUESTION
SuMan Magazine Publishing Company sells magazine subscriptions on an annual basis covering 12 issues. Subscriptions totaling $36,000 were collected on June 1, 2012 and the total amount collected was recorded in a temporary account. The monthly magazines were delivered in June through December. The required adjusting entry at December 31, 2012 would include:
a debit to Unearned Magazine Revenues.
a credit to Magazine Revenues.
a debit to Accounts Receivable.
a debit to Magazine Revenues.
none of the above.
SOLUTION:
HERE IN THE QUESTION IT IS GIVEN THAT SUBSCRIPTION RECEIVED IN ADVANCE ON JUNE 1, 2012 FOR THE YEAR ENDING 31 DECEMBER 2016 AND AMOUNT COLLECTED IS RECORDED IN A TEMPORARY ACCOUNT. HENCE WE MADE ENTRY ON JUNE 1,2012 IS
BANK A/C DR….. $36,000 TO UNEARNED MAGAZINE REVENUES $36,000 ( BEING AMOUNT RECORDED)
AT THE YEAR END I.E: DECEMBER 31. 2012
A ADJUSTING ENTRY TRANSFER i.e:
UNEARNED MAGAZINE REVENUES $36,000 TO PROFIT AND LOSS A/C $36,000 (BEING ADJUSTMENT ENTRY MADE )
HENCE CORRECT ANSWER IS : TO UNEARNED MAGAZINE REVENUES $36,000