On October 1, 2018, $30,000 of annual magazine subscriptions were sold by Cat World Magazines. The total cost of the subscribed magazines is $18,000, equal to $1,500 per month. The subscribed magazines are delivered on the first day of each month beginning on October 1, 2018. What is the amount of the cost of the magazines to be recognized during 2018?
A)$18,000
B)$12,600
C)$2,400
D)$4,500

Question

Quizplus · Accepted Answer

Since the magazines are delivered monthly, only the cost of the magazines delivered in October, November, and December 2018 will be recognized in 2018. Therefore, the total cost of magazines recognized in 2018 is $1,500 x 3 = $4,500.

On October 1, 2018, $30,000 of Annual Magazine Subscriptions Were