Required information [The following information applies to the questions displayed below.] A local theater company sells 1,100 season ticket packages at a price of $240 per package. The first show in the 10-show season starts this week.
(a) The sale of the season tickets before the first show.
(b) The revenue from fulfilling the performance obligation by putting on the first show. Indicate the effects of the amounts for the above transactions. (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.
1) Indicate the effects of the amounts for the above transactions
| assets= | liabilities+ | stockholders eq |
1b) Prepare the journal entries related for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
-A local theater company sells 1,100 season ticket packages at a price of $240 per package. Record the sale of the season tickets before the first show.
-A local theater company sells 1,100 season ticket packages at a price of $240 per package. Record the revenue after the first show.
| Indicating the Effects of the Amount for the Transactions: | ||||||||
| Assets | = | Liabilities | + | Stockholders' Equity | ||||
| (a) | Cash | $264,000 | = | Unearned Revenue | $264,000 | + | No Effect | NE |
| (b) | No Effect | NE | = | Unearned Revenue | ($26,400) | + | Service Revenue | $26,400 |
| Event | Account Titles | Debit | Credit |
| a) | Cash | $264,000 | |
| Unearned Revenue | $264,000 | ||
| $240 * 1100 Shows | |||
| (To record the Revenue of After the First Show) | |||
| b) | Deferred Revenue | $26,400 | |
| Service Revenue | $26,400 | ||
| ($264,000 * 1/10 Shows) | |||
| (To record the Revenue after the First Show) |
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