In 2017,you and 5 other investors invested $12,000 in a new theatre,Rock-On,that offers Broadway play productions.Because you live out of state,you have not been actively involved in the daily affairs of the theatre.On January 10,2018,you are excited because you received $12,000 as a dividend after the end of the first year of the theatre's existence.Included with your $12,000 check are financial statements and some supplemental information regarding the accounting.The supplemental information explains:
(1)During the last three months of 2017,an aggressive advertising campaign resulted in the sale of 600 season tickets for the 2018 productions.Each season ticket cost $120,and the resulting $72,000 was included in 2016 income.
(2)Along with the advertising campaign,the general manager was able to secure pledges of $7,500 for advertising by local merchants in the playbills for the first two productions for 2018.This amount is included as advertising revenue in the 2017 financial statements.
REQUIRED:
Are there any problems related to the supplementary disclosures? If so,explain and indicate what effects (over- or understatements)these items will have on the financial statements.

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The Answer of In 2017,you and 5 other investors invested $12,000 in a new theatre,Rock-On,that offers Broadway play productions.Because you live out of state,you have not been actively involved in the daily affairs of the theatre.On January 10,2018,you are excited because you received $12,000 as a dividend after the end of the first year of the theatre's existence.Included with your $12,000 check are financial statements and some supplemental information regarding the accounting.The supplemental information explains:
(1)During the last three months of 2017,an aggressive advertising campaign resulted in the sale of 600 season tickets for the 2018 productions.Each season ticket cost $120,and the resulting $72,000 was included in 2016 income.
(2)Along with the advertising campaign,the general manager was able to secure pledges of $7,500 for advertising by local merchants in the playbills for the first two productions for 2018.This amount is included as advertising revenue in the 2017 financial statements.
REQUIRED:
Are there any problems related to the supplementary disclosures? If so,explain and indicate what effects (over- or understatements)these items will have on the financial statements.

In 2017,you and 5 Other Investors Invested $12,000 in a New