BE13-4 (L01) Sport Pro Magazine sold 12,000 annual subscriptions on August 1, 2017, for $18 each. Prepare Sport Pro’s August 1, 2017, journal entry and the December 31, 2017, annual adjusting entry, assuming the magazines are published and delivered monthly.
The amount of subscription revenue is $90,000.
The subscription is the amount of money paid by a subscriber to any entity, institute, or club to remain effective in its membership over the period. It is income for receiving entity.
Accounts and Explanation
August 1, 2017
Unearned Subscription Revenue (12,000 x $18)
December 31, 2017
Unearned Subscription Revenue
Subscription Revenue ($216,000 x 5/12)
(Multiple-Step and Single-Step Statements) Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to P. Bride Company ($000 omitted).
Officers’ salaries $4,900
Depreciation of office furniture and equipment $3,960
Cost of goods sold $60,570
Rent revenue $17,230
Delivery expense $2,690
Sales commissions $7,980
Depreciation of sales equipment $6,480
Sales revenue $96,500
Income tax $9,070
Interest expense $1,860
Faith Battle operates a health food store, and she has been the only employee. Her business is growing, and she is considering hiring some additional staff to help her in the store. Explain to her the various payroll deductions that she will have to account for, including their potential impact on her financial statements, if she hires additional staff.
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