In Its 2013 Annual Report to Shareholders, Ank-Morpork Times Inc

question 36

Essay

In its 2013 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 2013, what amount of revenue did it recognize during 2013 from this source? Show the relevant T-account information to support your answer.

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Definitions:

Eye Contact

The act of two people looking into each other's eyes, which is a crucial non-verbal communication tool indicating various emotions and intentions.

Low-Context Culture

A communication style where most of the information is explicitly stated in the message itself, relying less on the context or non-verbal cues.

Receptive Mind-Set

An attitude or readiness to receive new ideas or information without prejudice.

Time

A constant, quantifiable value through which occurrences are sequenced from the past, through the present, and into the future.