Question

Walden Company collects the annual fee for 100 magazine renewals. The annual price is $104 per subscription and covers 52 weekly magazines. The subscription period is from July 1 till June 30 of the following year. During the current calendar year for each subscription, Walden should recognize

Answer 1

$5,200

Step-by-step explanation:

Annual price for each subscription is $104 covering the period from July 1 to June 30 (that is 52 weeks).

Half of this period fall in the current calendar year. i.e. July 1 to December 31 = 26 weeks.

Therefore, the amount to be recognized in the current calendar year is half the total subscription fee.

Total subscription fee = $104 * 100 renewals = $10,400.

There, half of that which will be recognized in the current calendar year

= 50% of $10,400

= $5,200.