Exercise 10-4 Moreno Company publishes a monthly sports magazine, Fishing Previe
ID: 2550123 • Letter: E
Question
Exercise 10-4
Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $26 per year. During November 2017, Moreno sells 24,252 subscriptions beginning with the December issue. Moreno prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue.
Date
Account Titles and Explanation
Debit
Credit
Nov. 30
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
Date
Account Titles and Explanation
Debit
Credit
Mar. 31
Exercise 10-4
Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $26 per year. During November 2017, Moreno sells 24,252 subscriptions beginning with the December issue. Moreno prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue.
Prepare the entry in November 30 for the receipt of the subscriptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date
Account Titles and Explanation
Debit
Credit
Nov. 30
Prepare the adjusting entry at December 31, 2017, to record sales revenue recognized in December 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date
Account Titles and Explanation
Debit
Credit
Dec. 31
Prepare the adjusting entry at March 31, 2018, to record sales revenue recognized in the first quarter of 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date
Account Titles and Explanation
Debit
Credit
Mar. 31
Explanation / Answer
No. Date Account Titles Debit Credit (a) Nov. 30 Cash (24,252 x $26) $630,552 Unearned Subscription revenue $630,552 (b) Dec 31 Unearned Subscription revenue $52,546 Subscription revenue ($630,552 / 12) $52,546 (c) Mar 31 Unearned Subscription revenue $157,638 Subscription revenue ($630,552 x 3/12) $157,638
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