Healthy Living, a diet magazine, collected $480,000 in subscription revenue on May 31st. Healthy Living earns a minimum of $351,000 from the buyers who are not the subscribers. Each subscriber will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. By the end of December, what is the amount of Subscription Revenue that has been earned?

Question

Quizplus · Accepted Answer

By the end of December, 7 months of subscription revenue have been earned (June to December). The total subscription revenue is $480,000 for 12 months, so the earned revenue is ($480,000 / 12) * 7 = $280,000.

Healthy Living, a Diet Magazine, Collected $480,000 in Subscription Revenue