In Its 2009 Annual Report to Shareholders, Ank-Morpork Times Inc

question 22

Essay

In its 2009 annual report to shareholders, Ank-Morpork Times Inc. included the following disclosure:
REVENUE RECOGNITION
 Advertising revenue is recognized when advertisements are published, broadcast or when placed on the Company's Web sites, net of provisions for estimated rebates, credit and rate adjustments and discounts.
 Circulation revenue includes single copy and home-delivery subscription revenue. Single copy revenue is recognized based on date of publication, net of provisions for related returns. Proceeds from home-delivery subscriptions and related costs, principally agency commissions, are deferred at the time of sale and are recognized in earnings on a pro rata basis over the terms of the subscriptions.
 Other revenue is recognized when the related service or product has been delivered.
Also, the following information on its current liabilities was included in its comparative balance sheets:
Required:
Assuming that Ank-Morpork Times Inc. collected $440,000,000 in cash for home delivery subscriptions during fiscal year 2009, what amount of revenue did it recognize during 2009 from this source? Show the relevant T-account information to support your answer.

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Definitions:

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, and free entry and exit from the market.

Pure Monopoly

A market structure characterized by a single seller controlling the entire market supply of a unique product, with no close substitutes.

Economic Profits

Profits exceeding the opportunity costs of all resources used by the firm, indicating an above-normal return.

Monopoly Rights

The exclusive power granted to a company or individual to produce, sell, or conduct business in a specific market without competition.