Question

37) Rothchild Company hires professional dance troupes and other performance artists from around the world to...

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

Homework Answers

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

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