Question

On April 1, Griffith Publishing Company received $2,628 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. The subscriptions started immediately. What is the amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period

Answer 1

Year 1 $657

Year 2 $876

Year 3 $876

Year 4 $219

Step-by-step explanation:

Calculation to determine the amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription assuming the company uses a calendar reporting period

First step is to calculate the amount of revenue per month

Revenue per month=$657. ($2,628/36)=

Revenue per month= $73 per month

Now let calculate amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription

Year 1= $73 * 9

Year 1 = $657

Year 2 =$73 * 12

Year 2= $876

Year 3= $73 * 12

Year 3= $876

Year 4= $73 * 3

Year 4 = $219

Therefore amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription are:

Year 1 $657

Year 2 $876

Year 3 $876

Year 4 $219