Improvements, a Home Improvement Magazine, Collected $960,000 in Subscription Revenue

question 140

Multiple Choice

Improvements, a home improvement magazine, collected $960,000 in subscription revenue on June 30. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the July issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of December? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

• A) $400,000
• B) $560,000
• C) $960,000
• D) $480,000

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Definitions:

Joint Venture

A business arrangement where two or more parties agree to pool their resources for accomplishing a specific task or project.

After Tax Profit

The net income a company earns after all taxes have been deducted from total revenue.

Miscellaneous Liabilities

A balance sheet item for obligations that do not fit into the standard categories of liabilities, often including various minor or irregular commitments.

Proportionately Adjusted Balance Sheet

A balance sheet method that adjusts the assets, liabilities, and equity based on a company's percentage ownership in other entities.