Mohling Company Typically Sells Subscriptions on an Annual Basis, and Publishes

question 98

Short Answer

Mohling Company typically sells subscriptions on an annual basis, and publishes eight times a year. The magazine sells 45,000 subscriptions in January at $10 each. What entry is made in January to record the sale of the subscriptions?

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Definitions:

FIFO Method

First In, First Out, an inventory valuation method that assumes that the first items placed into inventory are the first sold.

Ending Inventory

The total value of goods that remain unsold at the end of the accounting period.

Holding Gains

Profits resulting from the increase in value of an asset held over time, not realized until the asset is sold.

Merchandise Inventory

Merchandise Inventory consists of products that a company buys to resell at a profit. It is often one of the largest current assets for businesses that sell physical goods.