Question

Required information [The following information applies to the questions displayed below.) A local theater company sells 1,350 season ticket packages at a price of $280 per package. The first show in the 10-show season starts this week. (a) The sale of the season tickets before the first show. (b) The revenue from fulfilling the performance obligation by putting on the first show. 1. Indicate the effects of the amounts for the above transactions. (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.) Assets = Liabilities + Stockholders' Equity (a)

Answer 1

a Season tickets packages for 10 shows Price per package Total value received for 10 shows $ $ 1350 A 280 B 378,000 A*B Credit Accounts tittle Cash Unearned service revenue Debit 378,000 $ Classification Asset Liability $378,000 b Total value received for 10 shows Value of 1 show is $ 378,000 =$ 378,000/10 $ 37,800 Revenue earned out of unearned service revenue S 37,800 Credit Accounts tittle Unearned service revenue Revenue Debit 37,800 $ Classification (Liability) Stockholder's equity $ 37,800 Assets $ 378,000 (A) Cash (B) Liabilities + Stockholder's equity Unearned service revenue | $378,000 -NA- Unearned service revenue $ (37,800) Revenue -NA- $37,800