On December 31,the balance in the Prepaid Subscription account was $648.This is the remaining balance of a 12-month subscription purchased on September 30 in the current year.How much did this subscription originally cost?
A)$72
B)$648
C)$7,776
D)$864
E)$1,512

Question

Quizplus · Accepted Answer

To find out how much the subscription originally cost, we need to figure out the total amount of the subscription, and then subtract the portion of it that has already been used.

The subscription is for 12 months, and it was purchased on September 30. From September 30 to December 31 (the end of the year), there are three months. So, the portion of the subscription that has already been used is:

3/12 = 1/4

That means that 1/4 of the subscription cost $648. To find out how much the entire subscription cost, we can set up a proportion:

1/4 = $648/x

Where x is the total cost of the subscription.

To solve for x, we can cross-multiply:

1x = 4($648)
x = $2,592

So the original cost of the subscription was $2,592. Therefore, the answer is D) $864.

On December 31,the Balance in the Prepaid Subscription Account Was