Question

On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. The subscriptions started immediately. What is the amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period?

Answer 1

Answer:

$387

Explanation:

According to the calendar year, the amount of revenue recognized for the first year would be for 9 months i.e from April 1 to December 31

So, the revenue recognized amount is  

= Received amount × number of months ÷ total number of months given

= $1,548 × 9 months ÷ 36 months

= $387

Since the amount is given for 36 months but we have to consider for 9 months only and the same is to calculated above.