On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. The subscriptions started immediately.
- What is the amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period?
A) $387.
B) $430.
C) $516.
D) $129.
E) $0.

Question

Quizplus · Accepted Answer

The amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription is $387. This is because the subscription started on April 1, and the company uses a calendar-year reporting period. Therefore, the revenue for the first year of the subscription is for the period from April 1 to December 31. This is a period of 9 months, or 0.75 years. The total revenue for the 36-month subscription is $1,548, so the revenue for the first year is $1,548 * 0.75 = $387.

On April 1, Griffith Publishing Company Received $1,548 from Santa