Gossip Girl publishes and sells magazines catering to teenage girls. Subscriptions are sold for $36 for twelve monthly issues. The following chart indicates how many magazines were sold during 2020 and what payment they had received from subscribers by year-end. The first magazine is delivered the same month the subscription is sold. Gossip Girl uses the earning approach for revenue recognition. Instructions
a) How much cash did Gossip Girl collect in 2020?
b) What amount of revenue should Great Gossip report for the year ended December 31, 2020?
c) Are there differences between the amount of cash collected and the revenues recognized? If so, explain why.

Question

Gossip Girl publishes and sells magazines catering to teenage girls. Subscriptions are sold for $36 for twelve monthly issues. The following chart indicates how many magazines were sold during 2020 and what payment they had received from subscribers by year-end. The first magazine is delivered the same month the subscription is sold. Gossip Girl uses the earning approach for revenue recognition.  Instructions 
a) How much cash did Gossip Girl collect in 2020?
b) What amount of revenue should Great Gossip report for the year ended December 31, 2020?
c) Are there differences between the amount of cash collected and the revenues recognized? If so, explain why.

Quizplus · Accepted Answer

The Answer of Gossip Girl publishes and sells magazines catering to teenage girls. Subscriptions are sold for $36 for twelve monthly issues. The following chart indicates how many magazines were sold during 2020 and what payment they had received from subscribers by year-end. The first magazine is delivered the same month the subscription is sold. Gossip Girl uses the earning approach for revenue recognition.  Instructions 
a) How much cash did Gossip Girl collect in 2020?
b) What amount of revenue should Great Gossip report for the year ended December 31, 2020?
c) Are there differences between the amount of cash collected and the revenues recognized? If so, explain why.

Gossip Girl Publishes and Sells Magazines Catering to Teenage Girls