Evans Ltd. publishes a monthly newsletter for retail marketing managers and requ

Question

Evans Ltd. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $25 in advance for a one-year subscription. During the month of August 2016, Evans Ltd. sold 270 one-year subscriptions and received payments in advance from all new subscribers. Only 81 of the new subscribers paid their fees in time to receive the August newsletter; the other subscriptions began with the September newsletter.

b. Calculate the amount of subscription revenue earned by Evans Ltd. during the year ended December 31, 2016, for these 270 subscriptions.

b. Calculate the amount of subscription revenue earned by Evans Ltd. during the year ended December 31, 2016, for these 270 subscriptions.

Explanation / Answer

Yearly subscription charges $25 Total subscriptions 270 August month revenue (81*$25)*1 Month/12 Months $     168.75 September to December revenue ($25*270)*4 Months / 12 Months $ 1,800.00 Total subscription revenue earned for the year ended 31 December 2016 $ 1,968.75

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