Question

37) Rothchild Company hires professional dance troupes and other performance artists from around the world to perform in the United States during the first six months of each year. There is a new performance each month. On January 1, 2018, Rothchild company sells season passes for people interested in attending all six shows and receives $960,000 cash. The performances take place on the third Saturday of each month.

What is the balance in the company’s deferred revenue account at the end of April 2018? (Assume the deferred revenue account had a zero balance on January 1, 2018.)

	$960,000
	$480,000

	None of the above
	$320,000

$640,000

44) If inventory costs have been falling during the year, which cost method results in the highest gross profit for the year?

	Weighted average cost
	Specific identification

	FIFO
	LIFO

45) The assumption that a company makes about its inventory cost flow can affect cost of goods sold on its ______ and inventory on its _________:

	balance sheet; balance sheet
	balance sheet; income statement

	income statement; balance sheet
	income statement; income statement

Answer 1

1) What is the balance in the company’s deferred revenue account at the end of April 2018? (Assume the deferred revenue account had a zero balance on January 1, 2018.)

Deferred revenue account balance at the end of april 2018 = 960000*2/6 = 320000

So answer is d) $320000

2) If inventory costs have been falling during the year, which cost method results in the highest gross profit for the year?

So answer is d) LIFO

3) The assumption that a company makes about its inventory cost flow can affect cost of goods sold on its ______ and inventory on its _________:

So answer is c) income statement; balance sheet