Question

In its 2021 annual report to shareholders, Ank-Morpork Times Inc. included the following disclosure:

Revenue Recognition

• Advertising revenue is recognized when advertisements are published, are broadcast, or when placed on the Company's websites, net of provisions for estimated rebates, credit and rate adjustments and discounts.
• Circulation revenue includes single copy and home-delivery subscription revenue. Single copy revenue is recognized based on date of publication, net of provisions for related returns. Proceeds from home-delivery subscriptions and related costs, principally agency commissions, are deferred at the time of sale and are recognized in earnings on a pro rata basis over the terms of the subscriptions.
• Other revenue is recognized when the related service or product has been delivered.

Also, the following information on its current liabilities was included in its comparative balance sheets:

CURRENT LIABILITIES		2021			2020
Commercial paper outstanding	$	161,300,000		$	294,251,000
Accounts payable	$	173,950,000		$	177,552,000
Accrued payroll and other related liabilities	$	84,299,000		$	129,983,000
Accrued expenses	$	163,867,000		$	193,748,000
Accrued income taxes	$	228,220,000		$	9,882,000
Deferred subscription revenue	$	64,706,000		$	84,385,000
Current portion of long-term debt and lease obligations	$	2,564,000		$	2,629,000
Total current liabilities	$	878,906,000		$	892,430,000

Required:
Assuming that Ank-Morpork Times Inc. collected $443,000,000 in cash for home-delivery subscriptions during fiscal year 2021, what amount of revenue did it recognize during 2021 from this source? Show the relevant T-account information to support your answer.

Assuming that Ank-Morpork Times Inc. collected $443,000,000 in cash for home-delivery subscriptions during fiscal year 2021, show the relevant T-account information to support your answer.

	Deferred Subscriptions Revenue Beg. Bal. End. Bal.

Answer 1

Revenue Recognition of Ank - Morpork Times Inc. during 2021 Particulars Amount Cash Collection from Home Delivery Subscriptions Add: Decrease in Commercial Paper Outstanding Less: Decrease in Accounts Payable Less: Decrease in Accrued Payroll and other related liabilities Less: Decrease in Accrued Expenses Less: Current Portion of Long Term Debt and Lease Obligations Less: Decrease in Total Current Liabilites Add: Decrease in Deferred subscription Revenue 443,000,000 132,951,000 -3,602,000 -45,684,000 -29,881,000 -65,000 -13,524,000 19,679,000 502,874,000 $ Change in Income taxes is not considered for Revenue Recognition. Ank Morprok Times Inc will recognize $502,874,000 as reveue during 2021.