In Its 2018 Annual Report to Shareholders, Ank-Morpork Times Inc

question 51

Essay

In its 2018 annual report to shareholders, Ank-Morpork Times Inc. included the following disclosure:
Revenue Recognition
• Advertising revenue is recognized when advertisements are published, are broadcast, or when placed on the Company's websites, 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 2018, what amount of revenue did it recognize during 2018 from this source? Show the relevant T-account information to support your answer.

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Definitions:

Blogs

Websites or online platforms that feature regularly updated articles, posts, or commentary, usually on specific subjects.

Long-Term Relationships

Enduring bonds or partnerships formed between individuals or entities, characterized by ongoing interaction, collaboration, and mutual benefit.

Integrated Marketing Communication

Describes a strategic approach to marketing that combines various communication tools and channels—such as advertising, public relations, and social media—to create a cohesive and consistent message across all platforms.

Sender

The firm from which an IMC message originates; the sender must be clearly identified to the intended audience.