Question

Healthy​ Living, a diet​ magazine, collected $ 240,000 in subscription revenue on June 30. Each subscriber will receive an issue of the magazine in each of the next 12​ months, beginning with the July issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of​ December? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest whole​ number.)

Answer 1

Answer: $120,000

Explanation:

Given that,

On June 30,

Subscription revenue collected = $240,000

Each subscriber will receive = magazine in each of the next 12​ months

No. of months from July to December = 6

Here, company is using accrual method of accounting,

Amount of Subscription Revenue that has been earned by the end of December:

$=\frac{Subscription\ Revenue}{12}\times No. of months$

$=\frac{240,000}{12}\times6$

= $120,000