Question

Ticketmaster contracts with the producer of Blue Man Group to sell tickets online. Ticketmaster charges each customer a fee of $9 per ticket and receives $22 per ticket from the producer. Ticketmaster does not take control of the ticket inventory. Average ticket price for the event is $105. How much revenue should Ticketmaster recognize for each Blue Man Group ticket sold? Select one:

A. $9 because the $22 from the producer is similar to a negative cost of goods sold
B. $105 because the $83 is cost of goods sold paid to the Blue Man Group producer
C. $31 because both the fee from the customer and the Blue Man Group producer are earned
D. $114 because the $83 is cost of goods sold paid to the Blue Man Group producer
E. None of the above

Answer 1

The answer is: C) $31 because both the fee from the customer and the Blue Man Group producer are earned

Step-by-step explanation:

Revenue is all the income generated from business operations, it may be recorded as cash or accounts receivable.

So Ticketmaster should recognize $31 as revenue:

• $9 they receive in cash (from the customers)
• $22 they record as accounts receivable (from Blue Man Group).