Winston Company Sells Magazine Subscriptions for One- to Three-Year Subscription

question 91

Multiple Choice

Winston Company sells magazine subscriptions for one- to three-year subscription periods.Cash receipts from subscribers are credited to Magazine Subscriptions Collected in Advance,and this account had a balance of $9,600,000 at December 31,2013,before year-end adjustment.Outstanding subscriptions at December 31,2013,expire as follows: In its December 31,2013,balance sheet,what amount should Winston report as the balance for magazine subscriptions collected in advance?

• A) $2,000,000
• B) $3,800,000
• C) $7,600,000
• D) $9,600,000

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Definitions:

Laser Printers

Printing devices that use laser technology and toner to produce high-quality text and images on paper.

Quantity Demanded

Refers to the specific amount of a good or service that buyers are willing to purchase at a given price, at a specific point in time.

Perfectly Inelastic Supply

A market scenario where the quantity supplied is completely unresponsive to price changes at all price levels.

Supply Curve

A graph that shows the relationship between the price of a good and the quantity supplied, typically upward sloping reflecting higher prices incentivizing more supply.