Part A -Funny Romance 24/7 is an online streaming service which provides over 1,000 romantic comedy films and series online for customers to watch. Viewers can subscribe to the service for $36 for 12 months of unlimited viewing service. The company has prepared a tubulation showing how many 12-month sign-ups were sold during 2020 as well as payments received by their customers at year end December 31. The first subscription is delivered the same month the subscription is sold. Funny Romance 24/7 has elected to use the earnings approach to recognize their revenue.

Date# signups soldCash received

January 1200$ 7,200

May 135012,600

September 180028,800

December 165023,400

Calculate the amount of revenue that Funny Romance 24/7 should report at its December

31, 2020 year-end.

Part B - Maggie Scott runs a retail store. Her store's electricity bills arrive quarterly. The following electricity billings were received in 2021 for electricity consumption:

From December 1, 2020 to February 28, 2021: $300

From March 1 to May 31, 2021: $240

From June 1 to August 31, 2021: $210

From September 1 to November 30, 2021: $330

The bill for December 2021 has not yet been received.

REQUIRED:

How much was Electricity expense for 2021? State clearly any assumptions you made in calculating this amount

Part C -

Lightner Inc. purchased a machine for $150,000 on January 1, 2017. The company expected to use it for four years and then sell it for $20,000. Lightner uses the straight-line method of amortization (depreciation). Lightner sells the machine for $22,000 on June 30, 2021.

REQUIRED:

How much was the gain (loss) on sale?

Part D - Peach Inc. reported earnings per share of $12 in 2021. The dividend payout ratio was 40%. June Kay, who owned 20% of the common shares, received a dividend cheque for $45,600.

REQUIRED:

How many shares does June own? Also, how much were Peach's net earnings (net income) in 2021?

Answer rating: 100% (QA)

Part A Revenue Recognition for Funny Romance 247 To calculate the amount of revenue that Funny Romance 247 should report at its December 31 2020 yearend we need to determine the number of subscriptions sold during 2020 and the corresponding cash received Subscriptions Sold and Cash Received January 200 subscriptions sold cash received 7200 May 350 subscriptions sold cash received 12600 September 800 subscriptions sold cash received 28800 December 650 subscriptions sold cash received 23400 Total Subscriptions Sold in 2020 200 350 800 650 2000 Total Cash Received in 2020 7200 12600 28800 23400 72000 Revenue Recognition Funny Romance 247 uses the earnings approach to recognize revenue Under this approach revenue is recognized when the service is provided to customers Since the subscriptions are for 12 months and the first subscription ... View the full answer