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On April 1, Garcia Publishing Company received $1,818 from Otisco, Inc. for 36-month subscriptions to several different magazines. The subscriptions started immediately. What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period?

Respuesta :

TomShelby

Answer:

Accrued revenues for the first year: $ 454.5

Explanation:

1,818 is the value of 36 months of subscriptions.

Therefore, the value of a month is $ 1,818 / 36 months = $ 50.5

Garcia will recognize revenue as time past, each month will accrue a month of earnings.

For the first year will accrued from April 1st to December31th

That is 9 months:

50.5 per month x 9 months = 454.5

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