Question

​Mercury, Inc. sells tickets in advance for its weekly productions and records the proceeds as Unearned Revenue. At the end of each​ month, the company makes an adjusting entry to account for the tickets used during the month​ (ticket revenue.) On March​ 1, the Unearned Revenue account had a credit balance of $ 5 comma 000. During​ March, Mercury sold 400 tickets at $ 20 ​each, and 350 tickets were used during the month. What is the balance in Unearned Revenue at the end of​ March?

Answer 1

The balance in Unearned Revenue at the end of​ March is $6,000

Step-by-step explanation:

The computation of the unearned revenue balance at the end of​ March is shown below:

= Credit balance of unearned revenue + amount received from the sale of tickets - using the amount

= $5,000 + $8,000 - $7,000

= $6,000

The amount received equals to

= Number of tickets × selling price

= 400 tickets × $20

= $8,000

And, the using amount equal to

= Number of tickets used × selling price

= 350 tickets × $20

=$7,000