part 1. Last year the Martinville Moonfish, a not-so professional minor league f
ID: 2396205 • Letter: P
Question
part 1.
Last year the Martinville Moonfish, a not-so professional minor league football team sold $61,200 worth of season tickets for all seventeen games to willing fans. The $61,200 received for tickets to games that haven’t been provided yet would be considered….
Pre-season Revenues (included with normal sales revenue)
Unearned Revenues
Outstanding Sales
Contingent Liabilities.
Part 2.
PLEASE REFER BACK TO THE PREVIOUS QUESTION REGARDING THE MARTINVILLE MOONFISH.
If the revenues from prepaid ticket sales were recognized evenly over the course of the seventeen game season, what would be the journal entry that would need to be recorded following the first game?
Item 3 is the correct entry.
Item 4 is the correct entry.
Item 2. is the correct entry.
Item 1. is the correct entry.
1.Pre-season Revenues (included with normal sales revenue)
2.Unearned Revenues
3.Outstanding Sales
4.Contingent Liabilities.
Part 2.
PLEASE REFER BACK TO THE PREVIOUS QUESTION REGARDING THE MARTINVILLE MOONFISH.
If the revenues from prepaid ticket sales were recognized evenly over the course of the seventeen game season, what would be the journal entry that would need to be recorded following the first game?
Item Account DEBIT CREDIT Item 1. Cash $61,200 Accounts Receivable $61,200 Item 2. Unearned Revenues $3,600 Ticket Revenues Earned $3,600 Item 3. Cash $61,200 Ticket Revenues Earned $61,200 Item 4. Cash $4,280 Unearned Revenues $4,280 A.Item 3 is the correct entry.
B.Item 4 is the correct entry.
C.Item 2. is the correct entry.
D.Item 1. is the correct entry.
Explanation / Answer
Answer is D
Thats is the entry Cash A/c dr
To Unearned revenue A/c
Because, Until the income is earned by means of providing goods or services, it can not be considered as income of the year received. So, until the services are provided it is to be shown under the liability side of the balance sheet ( that is reason for crediting the Unearned revenue).
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