Healthy Living,a diet magazine,collected $480,000 in subscription revenue on May 31st.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.What is the amount of Subscription Revenue that has been earned by the end of December?

Question

Quizplus · Accepted Answer

By the end of December, 7 months of the 12-month subscription period have passed (June to December). Therefore, the earned subscription revenue is (7/12) * $480,000 = $280,000.

Healthy Living,a Diet Magazine,collected $480,000 in Subscription Revenue on May