Wizards Corporation, a newly developed internet game company, received $1,050,000 for 2,000 three-year subscriptions to a new
Question:
Wizard’s Corporation, a newly developed internet game company, received $1,050,000 for 2,000 three-year subscriptions to a new online game priced at $175 per year. The subscriptions do not start until November of 2009. Fill in the following chart for each of the given years to show the amount of revenue to be recognized on the income statement and the related liability reported on the year-end balance sheet. Wizard’s Corp fiscal year end is December31.
Revenue recognized during Unearned revenue at December 31 2009 2010 2011 2012
Step by Step Answer:
2009 2010 2011 2012 Revenue Recognized 5833333 35000000 35000000 29166667 2009 Revenue U...View the full answer
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers
Related Video
Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It can be thought of as a \"prepayment\" for goods or services that a person or company is expected to supply to the purchaser at a later date. As a result of this prepayment, the seller has a liability equal to the revenue earned until the good or service is delivered. This liability is noted under current liabilities, as it is expected to be settled within a year.
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